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Trend Alert: Nursing Homes Profit at the Expense of Vulnerable Patients

Posted  September 22, 2016

By Max Voldman

Monday’s announcement of the DOJ’s $28.5 million settlement with North American Health Care (“North American”) is the latest in a disturbing trend of healthcare companies profiting off of  medically unnecessary services provided (and sometimes not even provided) to America’s seniors. North American, a chain of 35 nursing homes in California, allegedly billed thousands of procedures to Medicare over the course of six years which were not needed by, and sometimes harmful to, patients. Two of the company’s executives also settled cases with the DOJ, totaling $1.5 million in personal liability.

This settlement follows a well-worn path of recently disclosed frauds. Just this month, two LA area physicians paid $3.5 million to settle allegations that they recruited patients to participate in needless nursing home stays in order to claim reimbursement from Medicare. Last month, the DOJ filed a case against Vanguard Healthcare, a Tennessee nursing home chain, accusing the company of unnecessarily medicating residents with psychotropic drugs and using unnecessary physical restraints. Vanguard’s actions resulted in residents suffering from pressure ulcers, falls, dehydration, and malnutrition. Additionally, DOJ took action against Monique Barbour, an eye doctor in Florida who once moonlighted as pop singer Anayya Von Kitten. She paid $1 million to settle the government’s allegations that she was performing medically unnecessary tests at nursing homes, falsely billing for tests that occurred when she was outside of the country, and often billed 20 hour days.

False claims act cases centered around allegations that involve medically unnecessary procedures are nothing new, but the current epidemic of fraud relating to nursing homes is quite acute. The exploitation of seniors for the financial gain of nursing home companies or related providers is an area of fraud that impacts both patient health and the integrity of the healthcare system as a whole. Whistleblowers, like those that brought the government’s attention to several of the above abusive practices, are an essential element of discovering and eliminating such fraud.

If any readers have any information on the ordering or use of medically unnecessary procedures, these actions can prove to be violations of the False Claims Act. Whistleblowers may receive a reward if they are the sources of such information.

Tagged in: FCA Federal, Lack of Medical Necessity, Medicare, SNF,