A California nursing company has agreed to pay a $30 million whistleblower settlement, to resolve allegations relating to the False Claims Act.

North American Health Care (NAHC) Inc. will pay $28.5 million and has entered into a five-year cooperative initiative with the U.S. Department of Health and Human Services’ Office of Inspector General for allegedly billing Medicare and Tricare for unnecessary medical services.

Company chairman John Sorenson will also pay $1 million, with senior vice president of reimbursement analysis Margaret Gelvezon agreeing to pay $500,000.

By agreeing to the whistleblower settlement, the company denies any wrongdoing and will be able to avoid additional damages from ongoing litigation.

NAHC operates 35 skilled nursing facilities, predominantly in California, meant to provide inpatient services to patients including: physical therapy, occupational therapy, and speech therapy.

Under the terms of the whistleblower settlement, all NAHC facilities will have their billing practices for their therapy services annually reviewed by an independent organization.

Overview of Whistleblower Settlement

According to the whistleblower settlement, from Jan. 21, 2005 to Oct. 31, 2009 the NAHC allegedly provided unnecessary services to patients and then billed Medicare and Tricare for these services.

This practice reportedly spread to three facilities through Dec. 03, 2011, with the whistleblower settlement naming Gelvezon as the leader of the scam and Sorensen as the enforcer.

“Medicare patients and those insured by Tricare are entitled to receive care necessary for their clinical needs and not the financial needs of their health providers… [h]ealth care providers will be held accountable if they bill for unnecessary services or treatment,” the Principal Deputy Assistant Attorney General involved in the whistleblower settlement said in a statement.

Filing a Whistleblower Lawsuit

The federal government encourages all individuals who may have witnessed some form of government fraud, to come forward to report it.

These individuals are called whistleblowers, who can be employees or other companies who report acts of government fraud and is the only way for individuals to report fraud and collect a cash reward.

As an incentive to report fraud, whistleblowers may be rewarded between 15 percent to 30 percent of whatever settlement is recovered. Whistleblowers are considered one of the most effective methods to defraud the government, saving the government and taxpayers billions.

Medicare fraud is one of the most common forms of healthcare billing fraud there is, with companies often billing the government for service either not performed or were not needed.

Medicare fraud can take many forms. If you are unsure exactly what constitutes medicare fraud or if you suspect that medicare fraud is being committed against the government, please contact an experience whistleblower attorney who can answer your questions and advise you of your legal options at no charge.