Justice Department Catches Hospice Creekside/Skilled Healthcare Group in $70 Million Dollar False Claims Act Scheme

Negotiations continue between the Justice Department and Creekside Hospice/Skilled Healthcare Group concerning allegations that the hospice health care provider breached the False Claims Act (“FCA”) when it sought Medicare reimbursement for ineligible services.  The whistleblowers claimed in a lawsuit that Creekside (which was acquired by California-based Skilled Healthcare Group in 2010) paid its employees bonuses for selling its hospice services to patients who were not given six months or less to live.  This is a requirement in order to receive hospice services.

In addition, the Justice Department caught Creekside in a scheme where it falsified patient medical records in a fraudulent effort to receive reimbursement by Medicare and Nevada’s state Medicaid program.  After being purchased by Skilled Healthcare Group, Creekside was pressured for years to bill the federal and state government agencies for unnecessary medical expenses to increase profit.  In fact, one of the allegations states that the President of Creekside was told to increase Medicaid patient volume immediately by 18 patients.

According to the Complaint, during a three year span, it billed Medicare $66 million dollars and Medicaid almost $5 million dollars.   In its defense, Creekside claims that it had physician certifications for the patients’ eligibility to receive hospice services. However, the DOJ retorted that those were falsified.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will step in and prosecute or step back and allow the whistleblower to bring the complaint on the government’s behalf.  Here, the Department of Justice decided to step in and intervene.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.