U.S. Attorney’s Office
Western District of Oklahoma
(405) 553-8700
July 28, 2015

Hospice Company Owner Sentenced to Serve Three Years in Prison and Pay More Than $2.5 Million in Restitution for Medicare Fraud

OKLAHOMA CITY, OK—PAULA KLUDING, 39, from Chandler, Oklahoma, the owner of Prairie View Hospice, Inc., an Oklahoma corporation located in Chandler, was sentenced by United States District Judge Robin Cauthron to serve three years in prison for committing Medicare fraud, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. As part of her sentence, Kluding was also ordered to pay $2,519,813.33 in restitution to Medicare. Kluding will also spend three years on supervised release following her release from prison.

According to evidence presented at trial, Prairie View Hospice was in business to provide hospice care to Medicare beneficiaries. Hospice care consists of providing health care, medication, medical equipment, and other goods and services to terminally ill patients. From July of 2010 through July of 2013, Kluding conspired with others to conceal the true medical condition of Prairie View Hospice’s patients and the true quality and quantity of health care services they were receiving in order to “pass” a Medicare audit and to fraudulently obtain money from Medicare. Specifically, certain medical documents were falsified to make it appear that nurses had visited patients or conducted necessary assessments when such visits and assessments had not, in fact, been made. Nursing notes were also falsified to make it appear that patients were in worse health than they actually were in order to justify to Medicare the patient’s continued hospice care. In addition, Prairie View Hospice, acting through Kluding, sent the falsified documents to a Medicare subcontractor in response to requests to audit patient files and in support of claims for Medicare reimbursement.

The trial lasted for four and half days and the jury deliberated about six hours before returning a guilty verdict on 39 separate counts relating to Medicare fraud, conspiracy, obstruction of a federal audit, and making false statements in health care matter. Kluding was ordered to report on August 28, 2015, to the U.S. Bureau of Prisons to begin serving her sentence.

This case is the result of an investigation by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Jessica Perry.

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