In The News

Healthcare Chain Agrees to Pay More Than $30 Million to Resolve False Claims Act Allegations

Profiting off of patients while ignoring medical needs is a theme we have often seen repeated in the government’s ongoing battle against healthcare fraud and abuse. This was the case earlier this month when the Department of Justice announced that Signature HealthCARE, LLC (Signature) – a company that owns and operates more than 100 skilled nursing facilities – has agreed to resolve charges that it violated the False Claims Act by knowingly submitting false claims to Medicare. The government further alleges that these claims were for rehabilitation services that were not reasonable or necessary. The government’s settlement with the Louisville, Kentucky based healthcare provider resolves allegations that Signature forged pre-admission certifications so that patients could be covered by Tennessee’s Medicaid program. Under the terms of the agreement, Signature has agreed to pay more than $30 million. The State of Tennessee is scheduled to receive portion of the settlement as well.

“Today’s settlement demonstrates our continuing efforts to protect patients and taxpayer by ensuring that the care provided to beneficiaries of government-funded healthcare programs is dictated by clinical needs, not a provider’s fiscal interests,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “Nursing home facilities provide important services to our elderly, and those facilities must uphold the trust placed in them by billing the government only for reasonable and necessary services.” 

The government alleges that Signature engaged in several illegal activities that resulted in the submission of claims that were unreasonable or unnecessary. It also alleges that Signature provided unskilled services to Medicare patients as well. Specifically, Signature is alleged to have:

  • Placed patients in the highest therapy reimbursement level rather than relying on placement based on individual medical need.
  • Provided patient with the minimum number of minutes required to bill at certain reimbursement levels and discouraged additional therapies that went beyond those minutes.
  • Pressured therapists and patients to complete planned therapies even when patients still needed to participate in therapy.

“Health care providers who engage in deceptive practices place patients at unnecessary risk and contribute to the financial distress of our federal healthcare programs,” said U.S. Attorney Cochran for the Middle District of Tennessee. “Our dedicated teams of civil enforcement attorneys will work tirelessly with the relators who report fraud such as this and with our law enforcement partners who investigate healthcare fraud. When we determine that companies are cheating the taxpayers, we will hold them accountable as we have in this case.”

The settlement with Signature arose from a lawsuit that was filed by two former signature employees Kristi Emerson and LeeAnn Teusca. Their lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act. These provisions permit private individuals to sue on behalf of the government for false claim and to share in any recovery that may results from such an action. Whistleblower lawyers are often retained to handle such matters. A qui tam attorney is skilled in all areas of the False Claims Act. The Act is designed to maintain the integrity of the healthcare claims system.