Nursing Home Manager to Pay $2.7M for Medicare Fraud, $405K to Whistleblower

Tennessee-based Grace Healthcare LLC and its affiliate Grace Ancillary Services LLC (collectively, Grace) have agreed to pay $2.7 million to settle allegations that they knowingly submitted false claims to the Medicare and TennCare/Medicaid programs for unnecessary rehabilitation therapy, the Department of Justice announced last week.

The suit alleged that from 2007 to 2011, Grace pressured therapists in ten of its nursing homes to meet targets for Medicare revenue regardless of patients' individual therapy needs.  This resulted in patients being billed for large amounts of unnecessary rehabilitation and therapy, which were then paid for by Medicare.  As part of the settlement, Grace has agreed to procedures and reviews to be put in place in order to prevent future similar conduct.

The suit was originally filed by an unnamed former Grace employee under the qui tam, or whistleblower, provisions of the False Claims Act.  The False Claims Act allows private citizens to bring suit on behalf of the government and share in the recovery.  The whistleblower in this case will receive $405,000.  The Justice Department has recovered $10.2 billion in healthcare fraud cases since January 2009.  The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.