Acute Healthcare Management Company Agrees to Pay More Than $1.7 Million to Resolve Alleged False Claims Act Violations
The government has once again sought to pursue companies that it alleges have sought to place profit over patient welfare. This was the case when the Department of Justice announced that Allegiance and four hospitals owned by the post-acute healthcare management company, have agreed to pay $1.7 million to resolve False Claims Act allegations. The company is accused of submitting and causing other hospitals to submit false claims to Medicare for reimbursement. Back in 2005, Allegiance entered into an agreement with several hospitals in the Southeast to provide Intensive Outpatient Psychotherapy (IOP) services to patients. At these hospitals, Allegiance established a system of identifying potential patients, and performing IOP services. The government alleges that at each of these treatment facilities Allegiance – through hospitals that it owned and operated – provided IOP services that:
- Did not necessitate patient treatment
- Did not create plans that sought to address individual patient’s needs
- Did not track or document each patients’ progress
- Did not provide patients with an appropriate level of treatment
- Did not set attainable goals for patient recovery
- Primarily provided patients with therapy that was recreational and not therapeutic.
“Federal funding for mental health services must be wisely and prudently spent,” said United States Attorney Cody Hiland for the Eastern District of Arkansas. “Allegiance sought this taxpayer money by targeting and taking advantage of vulnerable members of our population who sought mental health treatment, including those in the Eastern District of Arkansas. This office is dedicated to pursuing all appropriate remedies against companies who behave in such a manner.”
Other defendants that are a party to this settlement include:
- Allegiance Health Management, Inc.
- Allegiance Behavior Health Center of Plainview, LLC
- Allegiance Specialty Hospital of Kilgore, LLC
- North Metro Medical Center a/k/a Allegiance Hospital of North Little Rock, LLC
- Sabine Medical Center a/k/a Allegiance Hospital of Many, LLC.
“Medicare funds must be targeted to those with a legitimate need,” said Special Agent in Charge CJ Porter for the Office of Inspector General of the U.S. Department of Health and Human Services. “Entities that bill for needless services – as alleged here – cheat taxpayers and threaten the integrity of government health programs.” The government previously reached settlement with several other hospitals involved in this matter.
The settlement reached with Allegiance arose from a lawsuit that was originally filed in the Eastern District of Arkansas under the whistleblower or qui tam provisions of the False Claims Act. These provisions permit private parties to file suit on behalf of the United States for false claims. Plaintiffs can then use a qui tam law firm or whistleblower law firm. These kinds of firms are trained in all aspects of the False Claims Act. The original suit was filed by Ryan Ladner, a former program manager at Allegiance. Mr. Ladner is scheduled to receive approximately $300,000 as his share of the settlement.