Two management consulting companies and nine affiliated Alabama and Florida nursing homes will pay $10 million to settle a False Claims Act lawsuit filed by a whistleblower who accused the defendants of scheming to provide patients with unnecessary therapy and then billing Medicare for the unneeded services.
According to the U.S. Department of Justice, Southern SNF Management, Inc., Rehab Services in Motion (doing business as Dynamic Rehab) and the nursing homes instituted corporate policies and practices that encouraged the nursing facilities to provide patients with “medically unreasonable and unnecessary therapy without regard for patients’ individual clinical needs.”
The defendants then billed Medicare for unnecessary services, which amounted to the submission of false, inflated claims to the government, the whistleblowers alleged. Federal officials investigated the whistleblowers’ claims and chose to intervene in the lawsuit, effectively taking over its litigation.
According to federal prosecutors, the defendants engaged in these unlawful billing practices over a period of more than four years, starting in Oct. 2009.
The allegations stem from a whistleblower lawsuit filed by La-Wanda Davis, Tramecier Donald, and Megan Dinkins, all of who used to work for one of the nursing homes. The former employees filed the lawsuit under the whistleblower provisions of the False Claims Act, seeking to recover Medicare funds they thought were being spent on unnecessary services the nursing homes provided.
The whistleblowers will share an award of $2 million as an award for helping the U.S. recover the Medicare funds.
“The United States Attorney’s Office for the Southern District of Alabama is committed to holding accountable those who place profit over the medical needs of patients,” said U.S. Attorney Richard W. Moore for the Southern District of Alabama, who helped prosecute the whistleblower case along with other federal agencies. “The provision of excessive and medically unnecessary therapy services will not be tolerated.”