Nurses’ Registry Agrees to Pay $16 Million to Settle Medicare Fraud Allegations

A Kentucky-based company known as Nurses’ Registry and Home Health Corp. has agreed to pay $16 million to settle False Claims Act allegations that it defrauded the Medicare program. The case was originally filed by two whistleblowers – former employees of the company – who suspected it was exaggerating the home healthcare needs of the patients.

Under Medicare guidelines, a patient may qualify for in-home nursing services if the patient is homebound, unable to travel, and the services are necessary for the patient’s health and wellness. Of course, in-home nursing is much more costly than nursing services rendered in a facility and is only to be used in approved situations that require an endorsement from the patient’s treating physician.

In today’s case, the whistleblowers alleged significant and ongoing false billing practices by the company at the direction of its now-deceased owner.[1.Eslinger, Bonnie, “Nurses’ Registry to Pay $16 Million to Settle FCA Suit,” Law360.com, October 2, 2015, http://www.law360.com/articles/710638/nurses-registry-to-pay-16m-to-settle-false-claims-suit.] While the details of the qui tam reward offered to the relators has not been disclosed as of yet, it is not uncommon for whistleblowers to receive up to 25 percent of the ultimate settlement in cases wherein the government has intervened, as is the case here.

Details of the allegations against Nurses’ Registry

The Nurses’ Registry, along with Home Health Corp., employed visiting nurses to treat patients in the home setting. According to the details released by the government, the president of the company utilized a business model wherein staff members were directed to bill for home health services that shouldn’t have been covered under Medicare guidelines, padding profits and increasing revenue for the company. The lawsuit alleged that Nurses’ Registry implemented therapy services for patients who either did not need therapy, or would not have been able to actually benefit from such services. Moreover, the company is alleged to have kept formerly-eligible patients on the “roster” despite the patient having recovered. To accomplish this, the company is alleged to have back-dated patient records in order to appear as though the patients were eligible for home health services when, in fact, they were no longer eligible under the guidelines.

In addition to the fraudulent billing scheme, an investigation into the company’s activities revealed a startling number of kickbacks and illegal incentives offered to area physicians and practitioners in exchange for their willingness to refer clients to the company for services. Namely, doctors were offered bottles of alcohol, cash, and tickets to events like the Kentucky Derby and Taylor Swift concerts.

In addition to the $16 million settlement, Nurses’ Registry will be sold to an independent third party, and 70 percent of the proceeds will be directed to the Department of Justice. Moreover, the estate of the former owner will be liquidated, with 75 percent of proceeds forwarded to the DOJ.

The U.S. Attorney’s Office said in a statement, “For years, Nurses’ Registry abused its privileges as a provider in the Medicare program, and the trust of the medical community and general public….This settlement returns ill-gotten gains to the Medicare Trust Fund and ensures that Nurses’ Registry will have no further opportunity to defraud federal health care programs.”[2.“Lexington Home Health Agency and Estate of Deceased Owner Agree to Judgment of $16 Million to Resolve Allegations of Health Care Fraud,” Federal Bureau of Investigation, Louisville Division, October 1, 2015, https://www.fbi.gov/louisville/press-releases/2015/lexington-home-health-agency-and-estate-of-deceased-owner-agree-to-judgment-of-16-million-to-resolve-allegations-of-health-care-fraud.]

Contact a whistleblower attorney today

If you are aware of costly Medicare or Medicaid fraud and would like to discuss your information with a whistleblower attorney, please do not hesitate to contact Berger Montague today.