An $18 million deal has been struck in a Medicaid fraud and abuse case brought under the False Claims Act. The FCA claim named a nursing home company and accused them of falsely billing Medicaid and Medicare for services that allegedly were not provided to patients.

The U.S. Department of Justice recently released that the $18.6 million settlement will close out the False Claims Act suit that was brought by the state of Tennessee and the federal government.

The nursing home facility named in the Medicaid fraud and abuse case is Vanguard. Vanguard Health Care has reorganized under Chapter 11 bankruptcy and is responsible for paying $5.1 million in the settlement. The companies involved in the False Claims Act case continue to deny the allegations.

The settlement agreement does not state that there is an admission of liability. The nursing home company was accused of submitting false service claims to Medicaid and Medicare while providing worthless or substandard service to their patients at nursing facilities.

According to the lawsuit, five different nursing facilities failed to give medications appropriately to Tennessee patients, failed to provide wound care, used unnecessary physical restraints, failed to meet basic hygiene and nutrition requirements, and did not provide safe infection control.

Furthermore, the lawsuit argued that Vanguard submitted hundreds of forms through the Medicaid program in Tennessee that included forged physician and nurse signatures. The government anticipates that the recovery will be beyond $6 million because of the bankruptcy proceedings.

Whistleblower Claims

Many states and the federal government have targeted instances of Medicaid fraud by encouraging whistleblowers or those employees who have inside information about ongoing fraud schemes to come forward and report this information.

According to the Centers for Medicare and Medicaid Services, examples of Medicaid fraud include card sharing, up quoting, billing for unnecessary services or items, collusion, kickbacks, fraudulent program eligibility, billing for services that were not provided, and drug diversion. In many cases, instances of Medicaid abuse are brought forward by whistleblowers.

Nursing homes provide many services to patients, some of them under the umbrella of Medicaid or Medicare. When submitting claims through these programs, the agency or nursing home staff member responsible must ensure that these are legitimate claims.

Fraudulent claims have been targeted by federal agencies in recent years because of the suspected high volume of illegitimate claims submitted through both Medicaid and Medicare. Some of those instances involved fully-fledged schemes to regularly take money that should not be paid out to the submitting business or doctor. False Claim settlements totalled in the billions in 2018 alone.

The Medicaid Fraud and Abuse Lawsuit is Case No. 3:16-CV-02380 in the U.S. District Court for the Middle District of Tennessee.