Three Ohio Medical Companies and their executives are to pay $19.5 million to settle allegations of Medicare abuse according to a Department of Justice press release issued on July 17, 2017. These allegations were filed in two lawsuits under the False Claim Act’s whistleblower provisions, otherwise known as qui tam.

A qui tam lawsuit allows individuals to sue on behalf of the U.S. government for false claims made against public health insurance coverage like Medicare or Medicaid.

The recovery of funds allows for a percentage then to be returned to the initiating plaintiffs, who in this Medicare abuse case are Vladimir Trakhter, Paula Borne, and LaTasha Goodwin.

The three companies involved in this Medicare abuse settlement are Foundations Health Solutions, Inc. (FHS), Olympia Therapy Inc. (OT), and Tridia Hospice Care Inc. (THC).

There has been no liability determined in the cases, but the settlement will resolve allegations as will the five-year corporate integrity agreement (CIA) entered into by FHS, executive Brian Colleran, and the Health and Human Service Office of the Inspector General (HHS-OIG).

The CIA is an agreement for greater oversight and transparency into the business practices of FHS, designed to reduce the chance of any future fraudulent activity. The original qui tam lawsuits were filed in U.S. District Court for the Southern District of Ohio.

The settlement was reached as part of a multi-agency effort by the HHS-OIG, the Health and Human Services Office of Counsel (HHS-OC), Ohio Medicaid Fraud Control Unit, U.S. Attorney General’s Office for the Southern District of Ohio, and the Civil Division’s Commercial Litigation Branch.

The settlement also creates incentive awards for the whistleblowers. Former OT employee Vladimir Trakhter will get $2.9 million, and Paula Borne and LaTasha Goodwin, former THC employees will share $740,000.

Allegations in Medicare Abuse Lawsuits

The three medical companies named as defendants in associated Medicare abuse lawsuits were accused of presenting falsified claims against Medicare for rehabilitation therapy and hospice care that was not proven to be medically necessary.

The allegations referred to the time between January 2008 and December 2012. Allegedly, OT and Provider Services Inc. (PSI) submitted bills for unnecessary rehabilitation treatments at over 18 skilled nursing facilities. PSI was merged with BCFL Holdings Inc. and renamed FHS in 2013.

Other issues in this Medicare abuse case concern THC. THC allegedly didn’t do required medical examinations and pursue necessary certifications for hospice care between April 2011 and December 2012, yet put in false claims for hospice services provided. Technically, these patients were ineligible for this care.

Finally, executives Brian Colleran and Daniel Parker were accused of soliciting and getting kickbacks for their referrals to a local home health care services provider, Amber Home Care, LLC. These referrals originated from nursing facilities managed by FHS.

According to the DOJ press release, the coordinated effort of the agencies involved in this settlement reflects the ongoing commitment to protect vulnerable older and disabled Americans and the public health insurance system that provides for their medical and health needs. It is meant to discourage medical decisions made based on financial interest versus having the well being of the patient in mind.