This week’s Department of Justice “Catch of the Week” goes to Pennsylvania-based hospital chain Vibra Healthcare LLC. On Wednesday, the company agreed to pay $32.7 million to settle charges it violated the False Claims Act by billing Medicare for medically unnecessary services. Vibra operates roughly three-dozen long term care hospitals and inpatient rehabilitation facilities in 18 states. See DOJ Press Release.
Long term care hospitals are for patients with medically complex conditions requiring long hospital stays, and inpatient rehab facilities are for patients needing rehabilitative services with hospital-level care. According to the government, Vibra admitted numerous patients to five of its long terms care hospitals and one of its rehab facilities who did not qualify for admission. The government further alleged that Vibra extended the stays of its hospital patients without regard to whether the patients qualified for or actually needed the services provided, sometimes even ignoring the recommendations of its own clinicians.
In announcing the settlement, the government stressed that medical necessity is a core prerequisite to reimbursement under the government healthcare scheme:
Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers. All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.
The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan. She will receive a whistleblower award of at least $4 million from the proceeds of the government’s recovery.
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