Fatal Fraud? More Big Dollar Settlements by For-Profit Hospices

Yves here. It’s important to note that the settlements at issue may be not large by the standards of bank fraud, they are significant given how fragmented the health care industry is and that hospices are not high overhead facilities providing big-ticket services on a routine basis.

The author Roy Poses also expresses his frustration at being unable to find who “owns” Oak Hill Capital Partners, which in turn owns Accentcare, which owns Guardian Hospice, one of the two recent cases of hospice fraud that he discusses. Oak Hill Capital is owned the senior members its firm. You can find more details in its SEC Form ADV. See in particular, in particular:

Screen shot 2015-10-07 at 1.00.10 AM

You can find more information on . We have one of its limited partnership agreements in our .

By , MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Cross posted from the

Introduction – Commercialized Hospices

We have occasionally written about the rise of the commercialized hospice industry, and concerns that commercialized hospices may not be providing the compassionate care they promise.  As we have , the hospice movement began with small, non-profit, community based organizations meant to provide compassionate palliative care to the terminally ill.  However, in the US, the hospice movement has been co-opted by commercial hospices, often run by large corporations, which may put profit ahead of compassion.

In the Washington Post series “Aging in America,” Peter Whoriskey explored problems affecting the contemporary “industrialized” model of hospice.  He noted ,

The hospice industry in the United States is booming and for good reason, many experts say. Hospice care can offer terminally ill patients a far better way to live out their dying days, and many vouch for its value.

In the US, hospice care is funded by Medicare, and the funding at times may seem generous. As more hospices are taken over by for-profit corporations, that money may be irresistible. Whoriskey noted,

But the boom has been accompanied by what appears to be a surge in hospices enrolling patients who aren’t close to death, and at least in some cases, this practice can expose the patients to the more powerful pain-killers that are routinely used by hospice providers.

Whoriskey presented a case in which a non-terminally ill patient was admitted to hospice, and died possibly due to aggressive use of narcotics.

Clinard ‘Bud’ Coffey, 77, a retired corrections officer, did the crossword in The Charlotte Observer after breakfast every morning, pursued his hobby of drawing cartoons, talked seven or eight times a day to his son Jeff and, just two weeks before his death, told a pal that he still felt ‘like a teenager.’

He did, however, have some chronic back pain, and in late March he was enrolled in hospice care ‘essentially for pain management,’ his doctor said. Over a two week period, he received rising doses of morphine and other powerful drugs, grew sleepy and disoriented, and stopped breathing, dying peacefully at home, according to his family and medical records they provided.

While hospices tend to use very aggressive pain management strategies, they also by design do not attempt to cure patients who develop new acute problems. So if a non-terminally ill patient enters hospice, such a new acute problem could be fatal. For example, we a case in which a person admitted to a commercial hospice for “debility” but apparently not defined terminal illness, died from untreated sepsis. It is possible that timely use of antibiotics could have contained her initial infection, or possibly even cured her sepsis.

Yet evidence continues to accumulate that modern industrialized hospices, especially those owned and run by large for-profit corporations, may enroll patients who are not terminally ill to increase revenue. The regulatory response to such behavior continues to be spotty, and seems focused on enrollment of non-terminal patients as a form of fraud, not as a danger to patients.

So far in 2015 two commercial hospice chains settled charges that they enrolled patients who were not terminally ill.

Good Shepherd Hospice

Early in 2015, there was very abbreviated news coverage of the settlement made by Good Shepherd Hospice. A noted,

Today, Good Shepherd Hospice Inc., Good Shepherd Hospice of Mid America Inc., Good Shepherd Hospice, Wichita, L.L.C., Good Shepherd Hospice, Springfield, L.L.C., and Good Shepherd Hospice – Dallas L.L.C. (collectively Good Shepherd) agreed to pay $4 million to resolve allegations that Good Shepherd submitted false claims for hospice patients who were not terminally ill. Good Shepherd is a for-profit hospice headquartered in Oklahoma City which provides hospice services in Oklahoma, Missouri, Kansas and Texas.

The press release specifically stated,

The government alleged that Good Shepherd knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill. Specifically, the United States contended that Good Shepherd engaged in certain business practices that contributed to claims being submitted for patients who did not have a terminal prognosis of six months or less, by pressuring staff to meet admissions and census targets and paying bonuses to staff, including hospice marketers, admissions nurses and executive directors, based on the number of patients enrolled. The United States further alleged that Good Shepherd hired medical directors based on their ability to refer patients, focusing particularly on medical directors with ties to nursing homes, which were seen as an easy source of patient referrals. The United States also alleged that Good Shepherd failed to properly train staff on the hospice eligibility criteria.

However, it suggested that the behavior was fraudulent, not dangerous,

‘Health care fraud puts profits above patients, and steals from taxpayers,’ said U.S. Attorney Tammy Dickinson of the Western District of Missouri. ‘In this case, company whistleblowers alleged that patients received unnecessary hospice care while Good Shepherd engaged in illicit business practices to enrich itself at the public’s expense.’

Note that as is usual in cases of health care fraud, Good Shepherd Hospice did not admit wrongdoing, and no individual who authorized, directed or implemented the alleged bad behavior suffered any negative consequences. The minimal media coverage of this case did not discuss the possibility of any risks to patients. (For example, look .)

Good Shepherd Hospice is part of a for-profit corporation. I could find nothing about its ownership, who its leaders are, or its financial status.  So who particularly benefited from the alleged behavior was not clear.

Guardian Hospice and AccentCare, Owned by Oak Hill Capital Partners

In early October, 2015, a brief described the settlement by Guardian Hospice.

A Georgia hospice company has agreed to pay $3 million to resolve allegations it billed taxpayers for patients who were not terminally ill,…

In particular,

Guardian Hospice set aggressive targets to recruit and enroll patients it knew were not in the last months of their lives so it could collect Medicare payments, the federal government alleged.

The article noted the settlement arose from a whistle-blower law suit, and that the whistle-blowers

alleged they routinely saw non-terminal patients being treated but were told it was necessary to keep the hospice’s ‘census’ up,…

The AJC article did quote their attorney as saying,

the practice was ‘doubly cruel’ because when unqualified patients are put on hospice, they are forced to forego regular medical care that could help cure their illness.

But it provided no further detail. The only quoted an agent of the Department of Health and Human Services (DHHS) Inspector-General’s office:

Hospice care is only medically appropriate – and reimbursed by Medicare – for terminally ill patients who are in the last months of their lives

Again, there were no admissions of culpabality, and no actions taken against any individuals.

The $3 million penalty seems paltry, given that we do know something about the owners of Guardian Hospice and the depth of their pockets.  One about a June, 2015, settlement made by Guardian Hospice for underpaying its nurses, did mention that Guardian Hospice is owned by AccentCare.  A little more digging found made by Oak Hill Capital Partners, a large private equity firm.

Oak Hill Capital Partners announced today that following the closing of their acquisition of AccentCare, Inc. (‘AccentCare’), a premier provider of home healthcare services, including nursing and attendant care services, they intend to combine it with Guardian Home Care Holdings, Inc. (‘Guardian’), a leading homecare and hospice service provider in the Tennessee, Georgia and Texas markets. The terms of the transaction were not disclosed.

The combination of AccentCare and Guardian creates one of the largest operators in the industry, with an expanded geographical footprint and highly diversified service offerings. The new company will operate over 130 branches across 10 states, serving more than 30,000 patients.

Since private equity firms have minimal reporting requirements, we do not know who owns Oak Hill Capital Partners, and hence who owns AccentCare and Guardian Hospice. We do know from the Oak Hill Capital Partners web-site that is prodigious.

Summary and Discussion

There are more cases being reported in which hospices, particularly those owned and run by for-profit corporations, have enrolled patients who were not terminally ill.  These enrollments may be motivated by the desire for more money, but they put patients at risk.  Hospice patients may receive large doses of psychoactive drugs and narcotics, which may lead to adverse effects up to and including death.  Hospice patients may not, however, receive treatments for new acute problems, even if those problems are potentially curable.  Therefore, hospice patients may die from untreated infections that otherwise might respond to antibiotics.  Aggressive pain medication and withholding treatment of infections make sense as part of palliative care for terminally ill patients, e.g., those with terminal cancer.  But they make no sense for patients with longer life expectancy.

Nonetheless, such abuses by hospices get little press coverage, seemingly are ignored by health care regulators and law enforcement, and are almost completely anechoic in the health care, medical and health policy literature.

If a measure of society is how it cares for the most vulnerable patients, the US laissez faire approach to for-profit hospices suggests a society in decline.

To repeat what I wrote the last time for-profit hospices were (barely) in the news for enrolling the wrong patients,…

In my humble opinion, we should return control of direct patient care, especially of the most vulnerable patients, to health care professionals and if necessary small non-profit community organizations.  We ought to give strong consideration to banning corporate hospices, and banning all forms of the and corporate health care “delivery.”

Given how many insiders make so much money from the current version of laissez faire capitalism in health care, however, I would expect strong resistance should such apparently “radical,” but actually conservative proposals actually get any mainstream attention.

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36 comments

  1. Stephen Douglas

    Two major grammatical errors in your very first full sentence of the one paragraph you wrote for this post show that you are not checking your writing even once. Slow down, Yves. Proofread yourself, or have someone do it for you.

    1. Alex morfesis

      Or leave the typos please as any good copyright attorney will tell you, typos are the easiest way to prove infringement…

      1. skippy

        And increasingly in this world… a modicum of proof that a Human wrote it… and not some algo bot….

        1. Juneau

          I feel better being human seeing that first sentence. I have never seen a typo on this site in any of her articles prior to today. Yeah me! Yeah Yves!!

          Back to the article. I hope this gets broader attention. I know a couple of people who have been placed in “hospice care” after discharge from the hospital. Neither are terminally ill (no more than the averag person lol). Sounds like the hospitals are working with these programs I wonder if they are aware….the patients clearly are not aware of the conflict.

          1. Ian

            They happen, mostly on the simple stuff. The bridging. I come here for content and analysis though, which is unmatched.

    2. abynormal

      “The fool supply was controlled…
      Steinbeck The Moon Is Down

      Dear Mr. Stephens, the NC cast does NOT accept assignments. Ever.

      “In the world of dogma, you become free the day you decide to go to hell.

    3. annie

      come on. these are not ‘major grammatical errors.’ they’re the sort of errors difficult to catch re-reading.
      the sentences are easy to read, without even noticing the missing words.

    4. Yves Smith Post author

      There is all of one missing word. This is not “two major grammatical errors”.

      And pray tell where is the budget to have someone proofread posts? Are you proposing to write a big fat check for that or be up at 4 AM to provide that service? Readers want all sorts of things that would result in us needing much heavier staffing, like faster approval of comments and cleaner posts, but no one is actually willing to pay for that.

      And I was too sick to draft an original post, and didn’t want to complain about not feeling well in Links again. Comments like this serve to disincentivize my writing at all, given the givens of how thinly resourced this site is.

      You act as if I have more in the way of time and resources than I have. I don’t have more time. You are getting all that I have to give and this is what it looks like, warts and all, If this is not good enough for you, read another site.

      1. ekstase

        This criticism is nuts.

        The writing on this site is top-notch. Print publications hire copy editors because grammar mistakes and spelling mistakes happen.

        A writer who writes something for no money is giving you a gift. Picking on people who are giving you a gift is pretty mean. Why would anyone get on the internet to hurt other people?

  2. Gerard Pierce

    As you stated:
    “In my humble opinion, we should return control of direct patient care, especially of the most vulnerable patients, to health care professionals and if necessary small non-profit community organizations. We ought to give strong consideration to banning corporate hospices, and banning all forms of the corporate practice of medicine and corporate health care “delivery.”

    It’s more complicated than that. There is a network of “care” establishments ranging from “skilled nursing” to managed care to hospice. Almost all of these are sucking at the government teat and they sort of compete with each other to provide services.

    At the same time, there is a variety of rules and regulations. When my wife used up her 100 day eligibility for Medicare she was thrown out of the skilled nursing facility where she was gradually improving. Most of the alternative care facilities were too expensive. Her application for Medicaid was “pending” when they threw her out, and the best alternative at the time was Hospice.

    All of this determination of what service a patient gets is determined by a collection of nurses and social workers that I called the “medical mafia”. When my wife was about to leave hospital care, these are the people who directed the salesmen for “skilled nursing” organizations to her hospital room.

    After about 3 weeks I had to start a war to get her out of the hands of the recommended skilled nursing home to another group that could actually get the job done. Unfortunately, that change used up enough of her Medicare eligibility that she was ejected before her necessary treatment was complete.

    My disagreement is that the people providing these services were health care professionals. I didn’t see any visible corruption. I saw some dedicated professionals doing as good a job as the system would let them.

    In this case the system was a combination of medicare rules and corporate rules dedicated to milking Medicare for the maximum buck.

    At the same time, the organizations were typically corporate.

    The war that I had to fight involved an appetite stimulant that my wife had been taking that worked for her. She had a months supply but they insisted on filling the prescription from their pharmacy. The head nurse at the first skilled nursing organization said that that was the name of the medication they were giving her – but it didn’t work. I forced the head nurse to bring in the “Doctor” who said “give her the stuff that works. That resulted in incredible anger and started my effort to get her out of that place.

    We already have health care professionals in charge – doing what their corporate overlords tell them to do. It’s the entire system that needs reform.

    1. Yves Smith Post author

      Did you actually read the post? These organizations were fined for Medicaid fraud for sending non-terminal patients to hospices. That’s a flat out, obvious abuse. And you excuse it?

      Moreover, doctors are licensed. They have a professional obligation to stop this sort of thing. They have to sign orders and the related documents. This “oh they were just cogs in a corporate machine” excuse does not cut it.

      You are rationalizing corruption and presenting it as no big deal. I find that deeply offensive.

      1. Brian M

        Yves, I did not read (him?) as excusing anything. Just pointing out that it is a systemic problem that will not be cured by “returning care to the professionals” as the professionals are part of the system.

        1. Yves Smith Post author

          I read this part differently than you do:

          All of this determination of what service a patient gets is determined by a collection of nurses and social workers that I called the “medical mafia”.

          That’s not accurate. Staff at that level do not have make those decisions. They are made by doctors. They are enabling fraud.

          Accepting the “oh no one is really in charge, therefore no on in particular is to blame” does not cut it. These organizations have medical directors as well as doctors signing off on patient care.

  3. Larry

    Given that these are smaller settlements at the state level, it’s disheartening to see that no individuals are facing criminal charges for bilking public coffers for uneccessary care. I’ll admit that I did not click through to the main story to see if the facilities received any other substantial punishment beyond fine payments. But it’s clear that fraud will continue where it is profitable and has minimal effect on those carrying out the fraud.

    While it’s unrelated, the Volkswagen case is the biggest test yet to see if regulators will actually prosecute an individual for defrauding the public.

    1. JTMcPhee

      Interesting that the focus is mostly on “fraud.” What the author is highlighting is that these “hospice” referrals of non-terminal patients appear to be resulting in for-profit homicide by withholding of treatments for treatable medical conditions, and doing to people, patients, with a lot of life left in them, what happens in a smaller way even in hospitals and “nursing homes” (sic), “titrating narcotics upward until respirations cease.”

      But of course a “do not resuscitate” direction, and “palliative care only” orders, are partbofvwhat the patient or surrogate has to sign to get into hospice “care” in the first instance. So the paperwork’s in order, what’s bthe problem?

      Like with VW: the issue is people sickened and dying from emissions, nnot just cheating on a chemistry test. Same with drugs that the makers know wil sicken or kill, faulty ignition switches, Pinto fuel tanks and fillers, and of course the ultimate for-profit killing scam, WAR…

      1. cnchal

        . . . for-profit homicide . . .

        An accurate description of what Pirate Equity is doing here. Murder, handled like a traffic ticket.

  4. Carla

    It seems there is an implicit assumption that the problems with hospice are limited to for-profit corporations. They are not. Many large so-called non-profits (hospice organizations and hospital systems) do the same kinds of things. They are non-profits only in that they do not pay taxes, and therefore don’t have to spend time or treasure dodging the IRS.

    The corporate form is utterly corrupt.

  5. cnchal

    Ironic, eh?

    Taxes paid to fund government employees and their benefits, are recycled into Pirate Equity’s pockets, and fraud and for-profit homicide (thanks for that phrase JT) are the result.

    What a killer investment.

  6. tegnost

    I think we’ve reached the point where the life of the corporation is more important than the life of the patient. When you look at “smaller” issues like this and compare them with the TPP and the gymnastics that are engaged in to end run opposition (taking this from the comment by Chauncey Gardener that GMO labeling will be restricted) from the desires of the population. A sort of monstrous freudian machine that will impose on nature it’s “perfection”

  7. lylo

    In all honesty, did people not know this? This is going to get pretty dark, but let’s be real:
    We have assisted suicide in this country, completely legal and available to those in need. It’s called hospice.
    Where I live at least, it is pretty much acknowledged; that doctor who put the guy in hospice for “pain management” would have had to talk to the family and supervisors around here, usually with separate meetings between management and the patient as well. It’s not a simple referral, and there are a lot of “are you sure?” type questions directed at the patient, of course never actually acknowledging what we all know they are asking. If there is a next of kin or someone else has power of attorney, expect them to be involved as well.
    Doesn’t sound like an extra nurse being called in to administer a few extra meds and help out a bit, does it?

    It’s a bummer that it (of course) is getting abused by corporate pharmaceutical dispensing monopolies (“healthcare” has implications that these people don’t deserve so I refrain from the term, so now they are just “pill pushers” to me.)

    1. participant-observer-observed

      “Are you sure questions” are to ensure patient-centered care. Its actually not easy to keep doctors engaged with patients when there are no longer therapeutic goals beyond comfort measures. Part of the problem is the death denying social culture. Pt and family member s prolong agonizing dying in teaching facilities to try all kinds of experimental interventions rather than face the mortality we were all born with. Patients have to be their own advocate s and the best facilities will encourage it.

  8. tegnost

    “Again, there were no admissions of culpabality[sic], and no actions taken against any individuals.”
    We are a nation of trade laws. The freedom to rape and pillage democracy under the auspices of human rights using the law to create a new standard of world trade defined by investment rules. (h/t synoia)

  9. Don Lowell

    I have COPD and in a hospice situation. While I’m not going to die any time soon I am getting worse. I have 4 month’s to reach 80 and I doubt if I make it. I’m at home and well taken care of by these folks. CIAO

  10. Kris Alman MD

    The first time I learned about for-profit hospice was in 2009. My father, who was living in CO, was in a string of abysmal long-term care facilities (and don’t get me going on that scam!) having had multiple small strokes.

    They are vultures, preying on the elderly to take control of services they don’t provide. Then they want control of the meds to get the dollars to flow through their way (even though my father was already getting them through the VA). Needless to say, they confused staff when they didn’t re-order his diuretic on time, throwing him into congestive heart failure over a weekend. (My dad did like the morphine sulfate they used to acutely treat that on the following Monday.)

    Living out-of-state in Oregon, I heard about this fiasco and told my mom to fire this hospice–which she did.

    But now I see the connection to my home state. Phil Knight.

    This evil genius is the richest man here. He joined the Oak Hills Capital Partners “dream team” in 2005.

    Forbes now puts him at #17 in wealth with $26B.

    That’s up from #23 last year.

    Knight runs the state. And of course his Nike influence won over Congress(wo)men Bonamici, Blumenauer, and Schrader (Senator Wyden was another pushover) to get the necessary votes for fast track authority of the TPP.

    Oh… and he calls the shots here. Got a special session in December 2012 for “tax certainty” breaks.

    And he snookered the legislature into financing a bond for the OHSU Knight Cancer Institute.

    If you take a look at the picture in that article, you see his main cheerleader. Dr. Brian Druker is recognized for his research on Gleevec.

    In an opinion piece published in Blood in 2013, Druker was one of 100+ esteemed oncologists to argue for the need to lower the prices of cancer drugs to allow more patients to afford them and to maintain sound long-term healthcare policies.

    Needless to say, Phil Knight’s PhRMA goons would have been ecstatic to see “stronger” language in the TPP to make sure that biologics get 12 years of patent protections…

  11. Kris Alman MD

    While not talking about for-profit hospice per se… one additional comment regarding Gleevec.

    Gleevec is a rare drug that significantly changed outcomes for patients with Chronic Myeloid Leukemia. It meant that patients didn’t have to get bone marrow transplants and suffer the health and financial consequences of immunosuppression.

    Once that became clear, Novartis tripled the price of Gleevec. After all, think of the averted costs…

    That was the logic of Sovaldi’s retail price. Cure liver cancer and avoid liver transplant costs. I wrote a snarky piece for the Lund Report, “Drug Prices in America: ROI or RIP?” It should have been titled “ROI for the FIRE sector AND RIP for the People.”

  12. participant-observer-observed

    I don’t see why the executive board cannot be id’d from Secretary of State annual report filings. Especially for non-profit.

  13. participant-observer-observed

    Palliative care, hospice care, and non-therapeutic maintenance care can all be done in any skilled nursing facility or visiting nursing arrangement. The distinction is more to do with level and goals of care than the facility. Provided the latter is licensed and takes medicare patients, they will be players.

    Killing off hospice is not the answer to corporate corruption. Minimal inpatient time in any care facility is the most important factor for patient empowerment. Patient -caregiver run cooperatives would be ideal, but I suspect the rick scott/ObamaCare mafias would squeeze them out, unless done via informal economy.

  14. Observer

    Sorry, but have to clear up some misconceptions. Hospice does not provide assisted suicide. You have to go to Oregon or (now also) California for that. As a Hospice nurse I have been asked by family members of a suffering patient if there is anything I can do to “hasten the process.” There is not. All I can do is help to keep the patient comfortable as they go through the natural process of dying, something all of us go through just as we all go through birth.

    Patients are admitted to Hospice after a physician certifies that they have 6 months or less to live due to a life limiting illness (it used to be a year). Sometimes patients live longer and some “graduate” from Hospice. It isn’t always easy to predict. Some patients enroll in Hospice but decline to have a DNR. Patients can be enrolled in Hospice and still receive treatments such as chemo or dialysis or antibiotics if it contributes to their comfort. Since states administer Medicare/Caid it can differ from state to state.

    Some of the nation’s largest and oldest Hospices, like mine, are actually not for profit. (For those who don’t know, not for profits pay real estate and payroll taxes, just not corporate income tax.) A few non profits also remain. For profit Hospices are fairly new developments since Medicare and Medicaid began covering Hospice care via the “Hospice Benefit,” a paltry $250 per patient per month in my state, probably what it costs to send me on a couple of visits and yet we also provide social workers, chaplains, therapists, aides, and physicians.

    Personally, I can’t see how the corporates/private equity plans to profit from Hospice services but they seem to be piling on in droves. It can’t possibly all be through fraud as in the article’s example, although I don’t doubt it happens. Perhaps through pharmaceuticals as the Dr.’s comment suggests? Or purchase, pile on debt, and then raid? I guess we’ll see. It’s probably only a matter of time before the corporates squeeze out those remaining non profit and not for profit Hospices left standing. Once that happens, the care quality will surely decline like everything else in corporate healthcare. Very sad.

  15. dave

    having practiced hospital medicine for almost 20 years and grateful for all the services provided to my patients by hospice agencies this piece seems to be painting with a broad brush. don’t throw the baby (hospice) out with the bath water (the for profits)…

      1. dave

        Then I’m a fraudster. A typical elderly, demented, bedbound patient in and out of the hospital may not meet your definition of terminal but may be best served by hospice care, which is what I often recommend to families.

        Maybe the more relevant fraud is with non-terminal patients who don’t need hospice services (active pain mangement, active management of distressing psychiatric symptoms) but are being served by a hospice contract , the hospice agency gets it’s daily rate for the year, but doesn’t provide much in the way of services for the patient.

        1. Yves Smith Post author

          And why not a nursing home or an Alzheimers ward? Hospices med patients up for pain, not dementia. And Alzheimers patients benefit from certain types of special handling, like keeping their setting as familiar as possible, which are not important to typical hospice patients.

          1. dave

            Hospice is a medicare program not a place. Typically the patient stays in the same nursing home/Alzhemers ward, but the family has made it clear that in general they don’t want the patient coming back to the hospital for usual care (pacemakers, chest pain evaluations, biopsies of masses). Hospice has medicare dollars attached, which leads to the potential for overuse. Palliative care which is a broader term for focusing on quality of life over usual care tends not to be a defined benefit in commercial insurance or medicare but should be. In an imperfect world where hospice comes with money and palliative care doesn’t hospice is often the best option.

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