June 15, 2018

Catch of the Week — Signature HealthCARE

By the C|C Whistleblower Lawyer Team

In a major victory for patients and taxpayers alike, DOJ announced an over $30 million settlement with Signature HealthCARE, LLC, a Kentucky-based company accused of overbilling federal healthcare programs for rehabilitation and skilled-nursing services. As a prime example of how valuing profits over patients can lead to fraudulent behavior, Signature HealthCARE wins the title of Catch of the Week.

The settlement brings to a close an extensive investigation conducted jointly by the Civil Division of the Department of Justice, the United States Attorney’s Offices for the Middle District of Tennessee and the Northern District of Georgia, and numerous state and federal agencies. The investigation was triggered by a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.

Unreasonable, Unnecessary, and Unskilled Services

The lawsuit alleged that Signature HealthCARE engaged in multiple schemes with one common thread: government healthcare programs paying for inadequate or unnecessary services. For example, instead of assessing patients individually to determine the appropriate level of care, Signature HealthCARE presumptively placed patients in the highest level of care, regardless of their clinical needs. Signature HealthCARE also urged providers to supply the bare minimum amount of care required to bill at a given reimbursement level-and no more.

And perhaps most shockingly, the government asserted that Signature HealthCARE pressured both patients and therapists to fulfill plans of care even when the patients were ill or explicitly declined therapy. The government’s allegations depict a healthcare company that put profits over patients, seeking to maximize its own financial return at every stage with little regard for its patients’ best interests. And as a result, the government paid out millions in false claims.

The Whistleblowers

The government’s investigation stemmed from the actions of two former Signature HealthCARE employees. Kristi Emerson and LeeAnn Tuesca provided occupational therapy services in Signature HealthCARE’s 181-bed nursing facility in Columbia, Tennessee.  According to their FCA complaint, the whistleblowers had a first-hand look at Signature HealthCARE’s fraudulent tactics. Their supervisors set their work schedules based on maximum financial return, rather than patient need, meaning they often worked with patients who did not need therapy or who needed less therapy than provided.

Ultimately, Emerson and Tuesca decided they had to speak up. First, they did so internally, raising concerns through the company’s internal compliance program. When those efforts proved fruitless, they called the Medicare Fraud hotline to report their observations and subsequently filed a qui tam complaint detailing the fraud.

Three years later, their labors have led to a successful resolution. Signature HealthCARE’s schemes have been brought to light, and the government has successfully recovered millions of taxpayer dollars. Moreover, their courage in blowing the whistle sends a strong message that everyday people are willing to speak up when they see companies prioritizing profits over patients. In recognition of their vital role, the whistleblowers will receive a significant percentage of the government’s recovery.

Analysis

Commenting on the settlement, U.S. Attorney Donald Cochran for the Middle District of Tennessee stated, “Health care providers who engage in deceptive practices place patients at unnecessary risk and contribute to the financial distress of our federal healthcare programs. Our dedicated teams of civil enforcement attorneys will work tirelessly with the relators who report fraud such as this and with our law enforcement partners who investigate healthcare fraud. When we determine that companies are cheating the taxpayers, we will hold them accountable as we have in this case.”

Sadly, this will not be the last case where a company trusted with patient care puts its own profits first.  But as U.S. Attorney Cochran recognized, whistleblowers can play a key roll in rooting out and deterring fraud, particularly Medicare fraud. The False Claims Act is the foundation of the U.S. whistleblower system, as it allows private citizens, known as relators, to bring a lawsuit on the government’s behalf, rewarding them with a significant portion of the government’s recovery.

Emerson and Tuesca’s success should encourage other whistleblowers with knowledge of fraud to follow in their footsteps. This settlement is a perfect example of how knowledgeable insiders play a vital role in the government’s efforts to eliminate fraud-and can be rewarded financially for doing so.

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