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Nursing home concern to pay $30 million in False Claims Act case

Skilled nursing facilities are in a position of trust. Especially when Medicare and Medicaid are involved, some nursing home patients are vulnerable. To protect them and the American taxpayer, their care should always be directed by their medical needs; never by the financial interests of the nursing home.

Unfortunately, some healthcare providers engage in practices that burden both nursing care patients and the taxpayer with fraud, waste and abuse. The Justice Department recently settled a case against a company that owns and operates approximately 115 skilled nursing facilities in at least two states. The case alleged that Signature HealthCARE, LLC, (Signature) knowingly submitted false claims to Medicare the Medicaid program for Tennessee.

According to the allegations, Signature intentionally submitted claims for rehabilitation therapy that were not reasonable, necessary or provided by skilled practitioners. The company allegedly also submitted forged pre-admission certificates on behalf of patients.

The DOJ says that Signature engaged in a number of practices resulting in claims being submitted for unreasonable or unnecessary services or services performed by unskilled people. The government alleged that:

  1. Instead of performing an individual evaluation to determine each patient's most suitable level of care, Signature presumptively placed all patients in the highest therapy reimbursement level.
  2. Signature always provided the bare minimum number of minutes of therapy to obtain reimbursement and discouraged practitioners to provide any therapy above the minimum requirement.
  3. Even when patients were too ill or declined physical therapy sessions, Signature pressured both patients and therapists to complete planned therapy.

"Signature was charged with illegally boosting profits by providing excessive amounts of therapy to patients whether they needed it or not," said a spokesperson for the U.S. Department of Health and Human Services. "The decision to provide therapy should never be based on corporate financial considerations rather than a patient's medical needs."

This settlement resolves a lawsuit originally brought by whistleblowers. Two former Signature therapy employees filed the suit under the False Claims Act, which allows private citizens to file suit on behalf of the government to fight fraud, waste or abuse in government programs. In such cases, the government may choose to intervene, as it did in this one. In successful cases, whistleblowers are given a percentage of any recovered funds as a reward for blowing the whistle.

If you work in the healthcare field or any industry that performs government contracts, you may be in a position to blow the whistle on financial wrongdoing. To ensure you receive your fair share of any recovery and to limit the risk of retaliation by your employer, you should work with an attorney familiar with the False Claims Act or other whistleblower statutes.

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