Ohio healthcare companies Foundations Health Solutions Inc. (FHS), Olympia Therapy Inc. (Olympia), and Tridia Hospice Care Inc. (Tridia) have agreed to pay $19.5 million in a Medicare whistleblower settlement.

Their executives, Brian Colleran and Daniel Parker, agreed to pay the Medicare whistleblower fine to resolve serious False Claims Act violations allegedly made against the federal government. According to the Department of Justice, these healthcare companies allegedly submitted claims for unnecessary medical treatments for rehabilitation therapy and hospice services to Medicare.

Each of three whistleblowers will receive a Medicare whistleblower reward, one of which will be as high as $2.9 million.

Attorneys from the Justice Department’s Civil Division state that the Medicare whistleblower reward “reflects the Department’s continuing commitment to safeguarding patients and the Medicare system.”

Furthermore, the attorneys involved in the whistleblower litigation state that “clinical decisions should be based on patient needs rather than corporate profits.”

Overview of Medicare Whistleblower Lawsuit

As the corporate successor to Provider Services Inc., Foundations Health Solutions Inc. had provided management services to nursing homes and other facilities. PSI had merged with BCFL Holdings Inc. (BCFL) in 2010, and was later renamed to FHS in 2013.

Olympia had reportedly provided rehabilitation therapy service to patients in specific nursing facilities managed by PSI and BCFL, while Tridia had provided hospice care service options. According to the Medicare whistleblower lawsuit, executives Colleran and Parker had partial control ownership over these companies between 2008 and 2013.

During this time, the healthcare companies had allegedly billed Medicare for unnecessary rehabilitation and hospice services for patients. These claims were allegedly submitted from 18 skilled nursing facilities the healthcare companies owned, in which the government alleges the excessive therapy services were meant for the sole purpose of increased Medicare reimbursement.

The Medicare whistleblower reward settlement further resolves other alleged violations that occurred from April 2011 through December 2013, in which Tridia allegedly submitted faulty claims to Medicare for hospice services that were provided to patients ineligible for the Medicare hospice benefits.

These patients were ineligible due to Tridia allegedly failing to conduct proper medical examinations. The Medicare whistleblower reward settlement also resolves allegations from January 2008 through December 2012, in which Colleran and Parker allegedly asked for and received kickbacks in exchange for referring patients from skilled nursing facilities owned by the healthcare companies.

According to the Medicare whistleblower reward settlement, the FHS and Colleran have entered a five year cooperation agreement with the HHS Office of Inspector General. The agreement is designed to increase accountability for the companies, to help prevent any future instances of Medicare fraud.

The settlement resolves two separate qui tam lawsuits filed by former Olympia employees Vladimir Trakhter and former Tridia employees Paula Bourne and LaTasha Goodwin. For their participation as whistleblowers, Trakhter will receive a Medicare whistleblower reward of approximately $2.9 million, while Bourne and Goodwin will receive $740,000.

The Medicare whistleblower settlement came after attorneys from the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Southern District of Ohio, with assistance from the HHS Office of Council to the Inspector General and the Ohio Medicaid Fraud Control Unit, proved guilt.

These Medicare whistleblower lawsuits are United States ex rel. Trakhter v. Provider Services, Inc., n/k/a BCFL Holdings, Inc., et. al., Case No. 1:11-CV-217, and United States ex rel. Bourne and Goodwin v. Brian Colleran, et. al., Case No. 1:12-CV-935. The claims resolved by the settlement are allegations only, and there has been no determination of liability.