Health Care, Human Resources, and Law

Health organizations reach false-claims settlements with feds

February 25, 2015
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Two health care organizations that worked together have agreed to pay the U.S. government to settle false-claims allegations.

Grand Rapids-based U.S. Attorney Patrick Miles, Jr. said today that Agility Health and Oceana County Medical Care Facility, or OCMCF, have entered into agreements to pay the federal government a total of $1 million to resolve allegations that they submitted false claims to Medicare or caused false claims to be submitted to Medicare in violation of the federal False Claims Act.

Neither Agility Health nor OCMCF admitted liability as part of their settlements.

Agility Health agreement

Agility Health in Grand Rapids manages rehab services at 74 inpatient and outpatient sites in 17 states. It also provides rehab services to health care sites in nine states.

The company has agreed to pay a settlement of $850,000.

The company provided the following statement today in response to the settlement.

“After actively participating in the government's inquiry and carefully considering various paths, Agility Health determined that the best course of action for all of our stakeholders was to settle the Oceana matter and effectively close the issue. Agility Health, as always, remains committed to clinical compliance and quality care for the patients and clients we serve.”

OCMCF agreement

OCMCF is a county-owned facility that provides inpatient and outpatient rehabilitation services in Hart, north of Muskegon, and will pay a settlement of $150,000.

In a statement provided by OCMCF today, the organization said it “cooperated fully” with the investigation and has since “replaced its therapy vendor.”

“Oceana’s leadership, after consulting with legal counsel, concluded that a settlement — without claiming fault — rather than costly and lengthy litigation was in the best interest of the medical care facility. We are reviewing our options to recover the settlement funds,” according to the statement.

“Oceana County Medical Care Facility is committed to the highest professional and ethical standards. While this issue is regrettable, Oceana has taken several steps to prevent such an issue in the future. To that end, Oceana has redoubled its corporate compliance efforts: to include the appointment of a senior compliance officer, responsible for monitoring compliance of daily operations and reporting quarterly to the board; forming a Compliance Committee that includes senior management responsible for functions across the organization to address compliance-related matters and opportunities of improvement; education and training for the board and staff; and establishing a hotline for anonymous disclosure of issues of concern.”

The case

Beginning in 2008, Agility Health managed OCMCF’s therapy department, provided therapy-staffing services at OCMCF and assisted OCMCF in preparing insurance claims for therapy services, according to the U.S. Attorney’s Office for the Western District of Michigan.

The settlements announced today resolve allegations that between Jan. 1, 2009 and Dec. 31, 2013, Agility Health knowingly caused false claims to be submitted to Medicare, and OCMCF knowingly submitted false claims to Medicare, for inpatient skilled therapy services that were not provided, upcoded and medically unnecessary.

Agility Health and OCMCF billed Medicare or caused Medicare to be billed for, among other things, services that were purportedly rendered to patients who were mentally and physically unable to participate in therapy programs, according to the U.S.

The settlement with Agility Health also resolves allegations that during its tenure at OCMCF, Agility Health caused false claims for durable medical equipment to be submitted to Medicare.

An Agility Health employee at OCMCF improperly disclosed protected health information to an outside vendor in 2011 in violation of the Health Insurance Portability and Accountability Act of 1996, also known as HIPPA, according to the U.S. The vendor used that information to bill Medicare for unnecessary medical equipment that some patients never received.

“Patients in skilled nursing facilities should receive therapy based on their clinical needs, not the financial incentives of the companies and facilities that provide their care,” Miles said. “Patients also trust providers to protect their sensitive personal information as required by law.”

Miles said his office will “use all available options to hold providers accountable when they improperly disclose protected health information.”

The case was investigated by the U.S. Attorney’s Office for the Western District of Michigan. Assistant U.S. Attorney Adam Townshend represented the U.S.

Whistleblower case

The case resulted from a civil lawsuit filed by three whistleblowers, who all worked at OCMCF.

The lawsuit, known as a qui tam action, was filed under the False Claims Act, which allows private whistleblowers to bring lawsuits on behalf of the U.S. and receive a share of any recoveries.

In this case, the government intervened in the whistleblowers’ lawsuit.

The whistleblowers will collectively receive more than $200,000 of the settlement proceeds, as well as additional amounts for attorney fees and costs. 

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