Consumer Fraud

Nursing Home Chain Settles ‘largest worthless services’ case in U.S. history

nursing home residents 280x210 Nursing Home Chain Settles largest worthless services case in U.S. historyA Tennessee nursing home chain will pay the U.S. and Tennessee more than $18 million in a record settlement that federal officials called the “largest worthless services” case in U.S. history.

Vanguard Healthcare, five nursing homes it owns and operates, and two of the company’s executives engaged in a scheme that not only harmed vulnerable patients but cheated Medicare and Medicaid out of millions of dollars, federal prosecutors alleged.

Among the Justice Department’s many findings, the Vanguard nursing homes allegedly involved in the scheme failed to administer medications to residents as prescribed; failed to provide standard infection control; failed to provide wound care; failed to take prophylactic measures to prevent pressure ulcers; used unnecessary physical restraints on residents; and failed to meet basic nutrition and hygiene requirements of residents.

According to federal and Tennessee authorities, Vanguard not only provided these “grossly substandard or worthless” services to the residents of its nursing homes, it also billed Medicare and Tennessee’s Medicaid program, TennCare, for the services. Those billings amounted to a submission of false claims, the U.S. Justice Department said.

The U.S. government filed the False Claims Act lawsuit in Sept. 2016 against Vanguard, its majority owner and CEO William Orand, and its former director of operations, Mark Miller.

Vanguard Healthcare and several related Vanguard companies that have reorganized in bankruptcy agreed to pay more than $5.1 million towards the settlement, while two Vanguard nursing homes that are liquidating in bankruptcy will contribute $13.5 million toward the settlement. Mr. Orand and Mr. Miller will pay an additional $250,000 to resolve the allegations.

As part of the settlement agreement, the reorganized Vanguard and Mr. Orand also agreed to enter into a chain-wide, quality-of-care Corporate Integrity Agreement with the U.S Dept. of Health and Human Services for five years. Under this agreement, a quality-of-care monitor of the government’s choosing will be retained by Vanguard. The company will also be subject to closer regulatory oversight and bound to take measures to ensure it remains in compliance with federal and state nursing home rules and standards.