Former health care company owner settles False Claims Act allegations for $1.75 million

posted on:
March 8, 2016

Larry Golston

On March 2, 2016, the Department of Justice (DOJ) announced that Mark Conklin, the former owner of Recovery Home Care Inc. and Recovery Home Care Services Inc. (collectively RHC) will pay $1.75 million to settle kickback and False Claims Act (FCA) allegations. Though Conklin sold the RHC companies in 2012, the complaint alleges that he led a scheme to defraud the federal government from 2009 through 2012.

The complaint alleged that RHC paid dozens of physicians to review RHC patient charts; however, these physicians did little or no work, but still received thousands of dollars in compensation each month. The complaint also alleged that the payments to the physicians were not for quality reviews, but, instead, were kickbacks to induce physicians to refer their patients to RHC.

This type of scheme violates the Anti-Kickback Statute and the FCA, as it leads to federal monies being spent due to fraud. The purpose of the FCA and Anti-Kickback laws are to ensure that a physician’s judgement is not compromised by improper monetary incentives.

The United States does not draw a distinct line between individuals and corporations when it concerns health care fraud against the government. In this case, the government reached a settlement with both the seller of the RHC companies, Mark Conklin, and the buyer, National Home Care Holdings LLC.

Conklin settled the allegations for $1.75 million, and National Home Care Holdings agreed to pay $1.1 million to settle claims against it. The federal government, based on pattern and practice, will aggressively pursue FCA claims against both individuals and corporations when federal when FCA liability can be established.

The lawsuit against RHC was originally filed under the qui tam provision of the FCA by Gregory Simony, a former RHC employee.

The qui tam provision of the FCA allows private individuals to file lawsuits on behalf of the government when those individuals have knowledge of a person or company defrauding the government. Additionally, the FCA provides monetary incentives and protection for these whistleblowers, which include 15 percent to potentially 30 percent of the damages recovered. Mr. Simony will receive up to $315,000 as a reward for his part in the case.

Are you aware of fraud being committed against the federal government, or a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.

Source: U.S. Department of Justice

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