A settlement has been reached in a healthcare fraud whistleblower lawsuit which alleged that four nursing facilities sent fraudulent billing.

The United States Attorney’s Office announces that it reached an agreement with four skilled nursing facilities and two consulting companies which were accused of healthcare fraud. The defendants agreed to pay a combined total of $6 million to resolve the allegations put forth in a healthcare fraud lawsuit.

Caring Heart Rehabilitation and Nursing Center agreed to pay $1,272,891. GNH LLC agreed to pay $811,153.36. OPOP LLC agreed to pay $608,365.02. Riverview SNF LLC agreed to pay $1,206,590.62. Global Healthcare Services Group LLC agreed to pay $190,000. CHC GHC Clinical Consultants LLC agreed to pay $1,810,000.

The healthcare fraud lawsuit alleged that between January 2010 and January 2014 the defendants billed Medicare for skills therapy services that were either not delivered or not medically necessary. Medicare pays for rehabilitative services for 100 days following a qualifying hospitalization.

The benefit pays skilled nursing facilities a set rate based on patient needs, the level of services provided, and the amount of time spent treating patients. The lawsuit alleged that the four skilled nursing facilities and two consulting companies committed healthcare fraud by reporting false information about the level and amount of services provided.

One method through which they allegedly committed healthcare fraud was the misrecording of service times. The defendant allegedly billed Medicare for more minutes of care than were actually given. According to a statement by the U.S. Department of Justice, “the consulting companies and the SNFs put systems in place to maximize Medicare and Tricare reimbursement and that caused the submission of claims for therapy services that were either not provided or that were unnecessary”.

The initial lawsuit was filed under whistleblower provisions of the False Claims Act. The False Claims Act was enacted in 1863 by Congress amid concerns that suppliers of goods were defrauding the Army during the Civil War. Under the act, whistleblowers are protected if they report false claims to the government. If the lawsuit is successful in determining the validity of fraud claims, the defendants may have to pay up to triple the amount of each false claim they filed plus penalties of between $5,000 and $11,000 per violation.

If a whistleblower files a lawsuit under the False Claims Act, the whistleblower may be entitled to receive around 15 to 20 percent of any amount recovered by the government. As a result of the settlement, the whistleblower Tober will receive $990,000 for reporting the healthcare fraud he witnessed.

A common type of fraud reported to the government is healthcare fraud. It typically occurs when providers lie about the services provided, bill for the wrong services, or claim to have performed services that were not medically necessary. Another example is if physicians report elective treatments, such as cosmetic surgeries, as medically necessary and classify them incorrectly so that they get paid. Although the majority of healthcare fraud is committed by organized crime groups, dishonest health care providers can be equally at fault.

The Healthcare Fraud Lawsuit is Case No. RDB-12-2567 in the U.S. District Court in the District of Maryland.