Medicare fraud

A settlement has been reached in a whistleblower class action lawsuit brought against Grace Healthcare LLC and its affiliate Grace Ancillary Services LLC (Grace) . They are accused of knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy.

The whistleblower in this case will receive $405,000.

The whistleblower case was originally filed in 2010.  The federal government alleged in ten nursing home facilities in which Grace provided physical, occupational, and speech therapy for periods ranging from 2007 through June of 2011, Grace pressured therapists to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

A settlement has been reached in a whistleblower class action lawsuit brought against Hospice of Arizona LC, along with a related entity, American Hospice Management LLC, and their parent corporation, American Hospice Management Holdings LLC.  They are accused of submitting or causing the submission of false claims to the Medicare program for ineligible hospice services.

The whistleblower in this case will receive $1.8 million.

The initial whistleblower suit was filed in 2010.  The government's allegations were that Hospice of Arizona and its related entities submitted or caused the submission of false Medicare claims between Sept. 1, 2002, and Dec. 31, 2010, for Hospice of Arizona patients who did not need end of life care or for whom the hospice billed at a higher reimbursement rate than it was entitled.

The government alleged that Hospice of Arizona and its related entities, engaged in certain practices that resulted in the admission of ineligible patients or inflated bills, including pressuring staff to find more patients eligible for Medicare, adopting procedures that delayed and discouraged staff from discharging patients from hospice when they were no longer appropriate for such services, and not implementing an adequate compliance program that might have addressed these problems. As part of the settlement, American Hospice Management Holdings has agreed to enter into a corporate integrity agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

A settlement has been reached in a whistleblower class action lawsuit brought against Sound Inpatient Physicians Inc who is accused of overbilling Medicare and other federal health care programs.

The whistleblower will receive $2.7 million of the settlement amount.

The initital whistleblower lawsuit was filed in May 2009.  The United States alleged that, between 2004 and 2012, Sound Physicians knowingly submitted to federal health benefits programs inflated claims on behalf of its hospitalist employees for higher and more expensive levels of service than were documented by hospitalists in patient medical records.

A settlement has been reached in a whistleblower class action lawsuit brought against TranS1 Inc who is accused of causing health care providers to submit false claims to Medicare and other federal health care programs for minimally-invasive spine surgeries.

The whistleblower will receive $1,020,000 from the settlement.

The government's case was based upon a whistleblower lawsuit filed in April of 2011.  The federal allegations were that TranS1 knowingly caused health care providers to submit claims with incorrect diagnosis or procedure codes for minimally-invasive spine fusion surgeries using Trans1’s AxiaLIF System.  That device was developed as alternative to invasive spine fusion surgeries.  The United States further alleged that TranS1 improperly counseled physicians and hospitals to bill for the AxiaLIF System by using incorrect and inaccurate codes intended for more invasive spine fusion surgeries.  Additionally, the government alleged that, as a result, health care providers received greater reimbursement than they were entitled to for performing the minimally-invasive AxiaLIF procedures.   

Further to those allegations were that TranS1 knowingly paid illegal remuneration to certain physicians for participating in speaker programs and consultant meetings intended to induce them to use TranS1 products, in violation of the Federal Anti-Kickback Statute, 42 U.S.C.  § 1320a-7b(b), and thereby caused false claims to be submitted to federal health care programs.  

Also alleged by the government were that TranS1 promoted the sale and use of its AxiaLIF System for uses that were not approved or cleared by the U.S. Food and Drug Administration, including use in certain procedures to treat complex spine deformity, and which were thus not covered by federal health care programs.    

A settlement has been reached in a whistleblower class action lawsuit brought against Dubuis Health System and Southern Crescent Hospital for Specialty Care, Inc. (Southern Crescent).  They are accused of submitting false claims to Medicare.

The whistleblower will receive $2,160,000 of the government's recovery.

In June 2009, the whistleblower filed the first lawsuit.  The government's case alleges that between 2003 and 2009, Dubuis Health System and Southern Crescent knowingly kept patients hospitalized beyond the time considered to be medically necessary, to increase their Medicare reimbursement and to maintain Southern Crescent’s classification as a long-term acute care facility.

A settlement has been reached in a whistleblower class action lawsuit brought against Shands Teaching Hospital & Clinics Inc, Shands Jacksonville Medical Center Inc, and Shands Jacksonville Healthcare Inc (Shands Healthcare). They are accused of submitting false claims to Medicare, Medicaid and other federal health care programs for inpatient procedures that should have been billed as outpatient services by six of its health care facilities.

Of the $26 million settlement, $25,170,400 will go to Medicare and other federal health care payors.  The settlement also resolved allegations under the Florida False Claims Act; the state of Florida will receive $829,600. The whistleblower's portion of the recovery has not been determined.

A settlement has been reached in a whistleblower class action lawsuit brought against Gulf Region Radiation Oncology Centers Inc. (GRROC), Gulf Region Radiation Oncology MSO LLC, Sacred Heart Health System Inc., West Florida Medical Center Clinic P.A., Emerald Coast Radiation Oncology Center LLC (ECROC), Dr. Gerald Lowrey and Dr. Rod Krentel.

The whistleblower will receive $609,796 from the federal share of the settlement amount.

The original whistleblower suit was filed in September 2012,  The government alleged that between 2007 and 2011, the defendants regularly billed for radiation oncology services that were not supervised by a physician, as required by Medicare, Medicaid and TRICARE, and that, in fact, these services were often performed while the defendant doctors were on vacation or were working at another radiation oncology clinic. The government also alleged that the defendants billed for other treatment services even when patients’ medical records provided no evidence that the services were rendered. The defendants also allegedly billed twice for the same services and misrepresented the level of a service provided to increase their reimbursement from the federal health care programs.

A settlement has been reached in a whistleblower class action lawsuit brought against Kan-Di-Ki LLC, formerly known as Kan-Di-Ki Inc., doing business as Diagnostic Laboratories and Radiology (Diagnostic Labs).  They are accused of paying kickbacks for referral of mobile lab and radiology services subsequently billed to Medicare and Medi-Cal (the state of California’s Medicaid program).

The whistleblowers in this case will receive $3,755,500 as their share of the federal government’s recovery.

The initial case, filed by two whistleblowers, was filed in 2010.  The government's alleged that Diagnostic Labs was charging Skilled Nursing Facilities (SNFs) in California discounted rates for inpatient services paid by Medicare in exchange for the facilities’ referral of outpatient business to Diagnostic Labs.  For inpatient services, Medicare pays a fixed rate based on the patient’s diagnosis, regardless of specific services provided.  For outpatients, Medicare pays for each service separately.  Diagnostic Labs’ scheme enabled the SNFs to maximize profit earned for providing inpatient services by decreasing SNFs’ costs of providing these services.  It also allegedly allowed Diagnostic Labs to obtain a steady stream of lucrative outpatient referrals that it could directly bill to Medicare and Medi-Cal.  The provision of inducements, including discounted rates, to generate referrals is prohibited by federal and state law.

A settlement has been reached in a whistleblower class action lawsuit brought against Hospice of the Comforter Inc (HOTCI) who is accused of submitting false claims to the Medicare program for hospice services provided to patients who were not eligible for the Medicare hospice benefit.

The whistleblower's share of the government's settlement recovery has not been determined.

The whistleblower case was filed in August 2012.  The government's allegations were that between December 2005 and December 2010, HOTCI engaged in practices that resulted in billing Medicare for patients who were not terminally ill.  Specifically, HOTCI allegedly directed its staff to admit all referred patients without regard to whether they were eligible for the Medicare hospice benefit, falsified medical records to make it appear that certain patients were eligible for the benefit when they were not, employed field nurses without hospice training, established procedures to limit physicians’ roles in assessing patients’ terminal status and delayed discharging patients when they became ineligible for the benefit.

A settlement has been reached in a whistleblower class action lawsuit brought against The Ensign Group Inc who is accused of knowingly submitting to Medicare false claims for medically unnecessary rehabilitation therapy services. The Ensign Group Inc operates nursing homes across the western U.S. Six of Ensign’s skilled nursing facilities in California allegedly submitted the false claims:  Atlantic Memorial Healthcare Center, located in Long Beach; Panorama Gardens, located in Panorama City; The Orchard Post-Acute Care (a.k.a. Royal Court), located in Whittier; Sea Cliff Healthcare Center, located in Huntington Beach; Southland, located in Norwalk; and Victoria Care Center, located in Ventura.  

The whisltleblowers' share of the government's recovery has not been determined. 

The first of two whistleblower cases was filed in 2006.  The government's case alleged that between January 1, 1999, and August 31, 2011, six Ensign skilled nursing facilities submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary.  Specifically, Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare.  The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue.  These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels.  The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions.