In a press release issued by the Department of Justice on February 25, 2015, authorities revealed the details of alleged misconduct occurring within the national health management chain known as Agility Health, LLC and one of its local Michigan facilities known as Oceana County Medical Care Facility. The case was brought about by three concerned whistleblowers with firsthand information of the situation, all of which were former employees of Oceana. For their willingness to come forward, the whistleblowers were rewarded a collective award of $200,000, which is 20 percent of the overall settlement.
The case was settled under the federal False Claims Act, which contains qui tam provisions allowing individuals the opportunity to commence a lawsuit on behalf of defrauded taxpayers. For successful plaintiffs, rewards of up to 30 percent are not uncommon.
Details of the Medicare fraud scheme
Agility Health, LLC is headquartered in Grand Rapids, Michigan, and provides inpatient, outpatient, and health management services to care networks in 26 states. Oceana is a single facility serving the Oceana County area that offers skilled rehabilitation and therapy services to those in need.
Beginning in 2008, Agility began managing Oceana’s physical therapy department. As part of this agreement, Agility offered both staffing support and insurance and billing services, including the preparation of insurance claims for both government and private insurance reimbursements.
Following the inception of the arrangement between Agility and Oceana, the former began encouraging Oceana to engage in unlawful upcoding of therapy services, which involves billing insurers for services that were either never rendered or were actually rendered in a less costly format. Between 2009 and 2013, Agility and Oceana allegedly submitted claims to Medicare for therapy services that were supposed to have been offered to patients who, in reality, were too mentally or physically incapable of engaging in therapy. Oceana regularly offers therapy services, including arthritic aquatic classes, resistance and weight training, exercise programs, balance rehab, and many other options.
As part of the settlement, Agility also resolved claims that it submitted invoices to Medicare for durable medical equipment that was never actually received by patients. Moreover, Agility is alleged to have divulged protected medical data to an outside vendor for medical equipment that was never actually ordered.
Healthcare fraud under attack
The federal government, particularly the Department of Health and Human Services, has worked tirelessly to eradicate the type of misconduct described herein. With the enactment of the H.E.A.T. Task Force, federal authorities have been able to recover billions of dollars on behalf of taxpayers defrauded by this type of unlawful activity.
The U.S. Attorney’s Office said in a statement:
“Patients in skilled nursing facilities should receive therapy based on their clinical needs, not the financial incentives of the companies and facilities that provide their care….Patients also trust providers to protect their sensitive personal information as required by law. My office will use all available options to hold providers accountable when they improperly disclose protected health information.”
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