Two whistleblowers who accused Tennessee-based nursing home company Diversicare of submitting false claims to Medicare have led the U.S. government to a $9.5 million settlement.

nursing home wheelchair lady shutterstock 375x210 Nursing home operator pays U.S. $9.5M to settle whistleblower fraud allegationsDiversicare Health Services, which operates 74 nursing home and senior housing facilities across the country, had corporate policies and practices in place designed to overbill Medicare for the rehabilitation services it provided, the whistleblower lawsuits alleged, according to the U.S. Department of Justice (DOJ). The whistleblowers sued the nursing home company under the False Claims Act, a federal law that authorizes individuals to sue on behalf of the U.S. government in cases of fraud targeting taxpayer-funded agencies and programs.

From the beginning of 2010 through 2015, Diversicare directed its nursing homes to put beneficiaries in the highest level of Medicare reimbursement – Ultra High – regardless of the patient’s actual clinical needs, federal prosecutors alleged.

The company’s profit-driven policies and practices resulted in nursing home staff providing patients with unreasonable, unnecessary, and unskilled therapy, according to the whistleblower allegations. Diversicare then billed Medicare for physical and occupational therapy sessions that the patient didn’t need or were too frequent, long, and intense, regardless of the patient’s underlying medical conditions, according to the DOJ.

The government further alleged that Diversicare billed Medicare for services it never provided and that it threatened employees who didn’t maximize Ultra High therapies or fell below budgets, goals, and quotas for Medicare billing.

Diversicare also submitted false claims for these services to Tennessee’s Medicaid program, TennCare, using forged, photocopied, and pre-signed physician signatures on pre-admission evaluation certifications required by the state.

In addition to paying the U.S. $9.5 million, the settlement agreement requires Diversicare to enter into a five-year Corporate Integrity Agreement. The agreement puts the company under closer regulatory oversight and requires it to implement an auditing system to identify and address compliance risks.

“Families expect that their loved ones will receive the necessary care to improve their health and quality of life when they entrust them to a facility for care,” said Don Cochran, U.S. Attorney for the Middle District of Tennessee. “Companies who engage in a practice of cheating and exploiting public health care programs, while subjecting patients to unreasonable and unnecessary treatments in order to increase their profits, will pay a substantial penalty.”

The whistleblowers will share an award of $1.5 million for their role in bringing the case to the federal government’s attention. One whistleblower will receive an award of $1.4 million and the other will receive an award of $145,350, according to Becker’s Hospital Review.

If you have any questions about whether you qualify as a whistleblower, contact one of the lawyers on our firm’s Whistleblower Litigation Team for a free and confidential evaluation of your claim. Beasley Allen lawyers Larry Golston, Lance Gould, Paul Evans, Leslie Pescia, Leon Hampton, Tyner Helms and Lauren Miles are working in this area of law known as qui tam cases. A lawyer on the team will be glad to discuss the potential claim with you either in person or by phone.

We're here to help!

We live by our creed of “helping those who need it most” and have helped thousands of clients get the justice they desperately needed and deserved. If you feel you have a case or just have questions please contact us for a free consultation. There is no risk and no fees unless we win for you.

Fields marked * may be required for submission.

I never dreamed how much this would mean to me

I received another check today, much to my surprise. Thank you, thank you, thank you! I never dreamed how much this would mean to me in my golden years, as I have had hearing problems for years and needed to update my hearing aids, but with a limited income, found that was impossible. I now have the best hearing aids that I have ever had, thanks to you fighting so hard on my behalf.

—Gladys