Nursing Home Settles Allegations of Submitting False Claims for $2.7M

A nursing home management company has agreed to pay $2.7 million to the federal government to resolve a whistleblower lawsuit that alleged the company tried to defraud Medicare by submitting false claims. 

The settlement was reached between Grace Healthcare and the U.S. Department of Justice (DOJ) after the nursing home management company was accused of giving therapy to residents who did not need it in order to boost its Medicare reimbursements. The DOJ announced the settlement in a press release issued on March 8.

According to the DOJ, Grace Healthcare provided unnecessary therapy from 2007 to 2011, including occupational therapy, physical therapy, and speech therapy, to patients in order to boost Medicare revenue at 10 different facilities run by the Tennessee-based company.

In addition to the $2.7 million payment, the company has entered into a Corporate Integrity Agreement. The agreement is between the company and the Department of Health and Human Services Office of Inspector General (DHHS-OIG).

“In today’s economic climate, it is more important than ever for the United States to make sure that Medicare and Medicaid funds are spent appropriately,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the DOJ in the press release. “The Department of Justice will not tolerate those who abuse government health care programs by providing services based on their own financial considerations, rather than the needs of their patients.”

The case was brought to the government’s attention by a former Grace employee, who filed a whistleblower lawsuit. The employee will be paid about $405,000 out of the settlement as a reward for bringing the case to the government’s attention.

Under the qui tam provisions of the act, whistleblowers who expose the fraud by revealing information not publicly accessible are entitled to a portion of the money recovered. Whistleblowers must be the first to bring the case to the government’s attention and not publicize the lawsuit until the DOJ decides whether to join the prosecution of the case.