Consumer Fraud

Whistleblower Helps U.S. Recover $1.7 Million in Bogus Medicare Claims

Pills Stethascope on Money 435x289 Whistleblower Helps U.S. Recover $1.7 Million in Bogus Medicare ClaimsA whistleblower has helped the U.S. recover more than $1.7 million from Allegiance Health Management, Inc., a Shreveport, Louisiana-based hospital owner and manager, the U.S. Department of Justice announced last week.

Ryan Ladner, a former employee of an Allegiance-owned hospital in Hattiesburg, Mississippi, filed suit on behalf of the U.S. government, alleging the company submitted and caused other hospitals to submit False Claims to Medicare for services that were “not medically reasonable or necessary,” federal officials said.

Mr. Ladner filed the complaint under the whistleblower provisions of the False Claims Act, a longstanding federal law that allows private parties to seek reparation for the U.S government in cases of suspected fraud.

The Justice Department investigated Mr. Ladner’s claims and chose to intervene, thereby becoming an active litigant in the case.

According to the Justice Department, Allegiance set up Inspirations Outpatient Counseling Centers at several hospitals throughout the Southeast starting in 2005. These counseling centers were owned and staffed by Allegiance and provided intensive outpatient psychotherapy services to Medicare beneficiaries. They also identified potential patients and created patient treatment plans.

Based on their investigations of the whistleblower claims, federal prosecutors alleged that the services Allegiance provided through its Inspirations counseling centers were not eligible for Medicare reimbursement for several reasons.

Intensive outpatient psychotherapy services were not a necessary course of treatment for many patients, and the treatments were not designed to help individual patients address specific mental health needs and reach achievable goals, federal prosecutors alleged.

The government also claimed that Inspirations failed to adequately track and document patient progress. Many patients also received an inappropriate level of treatment and in other cases, the therapy provided was primarily recreational or diversional in nature, not therapeutic.

“The Department of Justice recognizes the value of accessible mental health care, but will not tolerate companies that seek to exploit our most vulnerable populations by delivering inappropriate or worthless services” said Acting Assistant Attorney General Chad D. Readler for the Justice Department’s Civil Division.

Mr. Ladner will receive approximately $300,000 as a whistleblower award for his role in helping the U.S. recover the Medicare funds.