Consumer Fraud

Whistleblowers’ Nursing Home Fraud Suit Leads to $30 Million Settlement

nursing home residents 280x210 Whistleblowers’ Nursing Home Fraud Suit Leads to $30 Million SettlementTwo whistleblowers who filed False Claims Act allegations against a large Kentucky-based nursing home corporation have helped the U.S. government and the state of Tennessee recover more than $30 million for Medicare.

The whistleblowers, both former employees of Signature Healthcare LLC, accused the company of defrauding Medicare by providing rehabilitation therapy services that were not reasonable, skilled, or needed by patients. Signature owns about 115 skilled nursing facilities, including seven in Tennessee’s middle district, where the whistleblowers filed their complaint in federal court.

One of the whistleblowers, Kristi Emerson, told The Tennessean she worked at Signature Healthcare of Columbia for more than 10 years. She said that by 2015, pressure from the top of the company became intolerable as managers demanded that therapists perform hours of therapy daily even if the patient didn’t need it.

According to the U.S. Department of Justice, Signature engaged in various practices that resulted in the submission of false claims to Medicare. Federal prosecutors investigated and backed the whistleblowers’ claims, alleging the Signature nursing facilities failed to perform individualized patient evaluations to determine their clinical needs and the most appropriate level of care.

Instead, the nursing facilities automatically placed patients in the highest therapy reimbursement level so that they could bill Medicare more services.

The nursing facilities also provided the minimum number of minutes required to bill at a given reimbursement level while discouraging employees form providing additional therapy beyond the minimum threshold, the whistleblower complaint alleged.

The lawsuit also alleged that Signature pressured therapists and patients to complete the planned minutes of therapy even when patients were sick or declined to participate so that it could maximize Medicare billings.

Additionally, Signature also forged admission documents that certified the need for skilled nursing therapy and submitted them to Tennessee’s Medicaid program, the whistleblower lawsuit alleged.

According to The Tennessean, the government estimated the total fraud allegedly committed by Signature Healthcare to be much larger — about $244 million. The company moved to settle the case quickly once a federal judge in Nashville unsealed the complaint on June 11.

Tennessee will receive a portion of the settlement for Medicaid funds it paid to Signature for the false claims, the Justice Department said.

Kristi Emerson and the other whistleblower, LeeAnn Tuesca, will also receive a part of the total settlement, between 15 and 25 percent, as their award for helping the government recover the Medicare and Medicaid funds.

“Signature was charged with illegally boosting profits by providing excessive amounts of therapy to patients whether they needed it or not,” said Charge Derrick Jackson, Special Agent in for the U.S. Department of Health and Human Services, Office of Inspector General. “The decision to provide therapy should never be based on corporate financial considerations rather than a patient’s medical needs.”