Home health Co. Careall to pay $25 Mill. to settle whistleblower case. Whistleblower gets $3.9 Million

CareAll Management LLC and its affiliated entities (collectively “CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to resolve allegations that CareAll violated the False Claims Act by submitting false and upcoded home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today. CareAll is based in Nashville, Tennessee, and is one of Tennessee’s largest home health providers. This settlement resolves allegations that between 2006 and 2013, CareAll overstated the severity of patients’ conditions to increase billings and billed for services that were not medically necessary and rendered to patients who were not homebound.

This is CareAll’s second settlement of alleged False Claims Act violations within the last two years. In 2012, CareAll paid nearly $9.38 million for allegedly submitting false cost reports to Medicare. As part of the settlement announced today, the companies agreed to be bound by the terms of an enhanced and extended corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG) in an effort to avoid future fraud and compliance failures.

“Fraudulent home-based services are surging across the country,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG in Atlanta. “We will continue to protect both Medicare and taxpayers, and ensure that funds are not siphoned off by companies more concerned with the bottom line than patient care.”

Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery. The relator in this case, Toney Gonzales, will receive more than $3.9 million as his share of the recovery.

The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, HHS-OIG and the Tennessee Bureau of Investigation.

The case is docketed as United States ex rel. Gonzales v. J.W. Carell Enterprises, Inc., et al., No. 12-0389 (M.D. Tenn.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

Jeffrey Newman represents whistleblowers but not this one.