Pain Management Group Agrees To Pay $312,000 To Resolve False Claims Act And Overpayment Allegations

Monday, July 24, 2017

Pain Management Group P.C. (“PMG”), based in Antioch, Tenn., has agreed to pay $312,000 to settle federal and state False Claims Act and overpayment allegations, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee.

The settlement resolves allegations that PMG caused the submission of false claims to Medicare and TennCare for medically unnecessary urine drug tests. The settlement also resolves allegations that PMG caused the submission of false claims to Medicare and TennCare for non-Food & Drug Administration (“FDA”) approved pharmaceuticals Botox, Supartz, and Eufflexa, which PMG purchased from foreign-based suppliers. The United States contends that PMG administered the non-FDA approved pharmaceuticals to Medicare and TennCare patients and then billed Medicare and TennCare for the pharmaceuticals.

The United States’ investigation was initiated after extensive data analysis identified PMG as a potential outlier in the provision of urine drug testing to Medicare patients. Over the course of the investigation, the United States discovered information regarding PMG’s administration of non-FDA approved drugs to Medicare and TennCare patients. Once informed of the investigation, PMG cooperated and instituted remedial measures to address the United States’ allegations. The alleged conduct occurred during 2014-2015.

This matter was investigated by U.S. Department of Health and Human Services-Office of Inspector General and the Tennessee Bureau of Investigation. Assistant U.S. Attorney Jason Ehrlinspiel represented the United States.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

Careall Companies Agree to Pay $25 Million to Settle False Claims Act Allegations

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.

“Home health agencies may only bill Medicare and Medicaid for care that is necessary and covered by the programs,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “This settlement is another example of the department’s commitment to ensuring that home health care dollars – which are so vital to ensure the care of homebound patients – are spent for their intended purposes.”

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 case demonstrates that enforcement of the False Claims Act is a priority of the U.S. Attorney’s Office for the Middle District of Tennessee,” said U.S. Attorney David Rivera for the Middle District of Tennessee.  “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the Medicare and Medicaid programs.”

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.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of HHS.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.1 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.

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.

Tennessee Substance Abuse Treatment Facility Agrees to Resolve False Claims Act Allegations for $9.25 Million

The Department of Justice announced today that CRC Health Corp. (CRC) has agreed to pay $9.25 million to the federal government and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tenn.  CRC,  based in Cupertino, Calif., is a nationwide provider of substance abuse and mental health treatment services.

“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.”

CRC owns and operates a residential substance abuse treatment facility in Burns, Tenn., called New Life Lodge.  The government alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program (TennCare) for substance abuse therapy services that were not provided or were provided by therapists who were not properly licensed by the state of Tennessee.  The government also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations; failed to maintain patient-staffing ratios required by Tennessee Department of Mental Health regulations and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility.  In addition, the government alleged that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility.  New Life Lodge currently is not treating Medicaid patients at its facility.

“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney for the Middle District of Tennessee David Rivera.  “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance.  When those services are required, the government will ensure that the treatment is provided with the highest possible quality of care to those patients.  Anything less is unacceptable.”

“Safeguarding TennCare’s mental and behavioral health support system is a particular focus of this office,” said Tennessee Attorney General Bob Cooper.

The allegations covered by the settlement were raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and to receive a share of any recovery.  Cederoth will receive $1.5 million as her share of the settlement proceeds.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta.  “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems.  We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”

The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, the Federal Bureau of Investigation, the Tennessee Attorney General’s Office, the Tennessee Bureau of Investigation and the Department of Health and Human Services Office of Inspector General.

“The FBI is committed to investigating allegations of wrongdoing and false claims related to federally funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the FBI.  “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”

“This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee,” said Director of the Tennessee Bureau of Investigation Mark Gwyn.

The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation Inc. , CV-3-11-00897 (M.D. Tenn.).   The claims asserted against the defendants are allegations only, and there has been no determination of liability.