False Claims Act Settlement

$21.5 Million False Claims Act Settlement Against Home Health Care Company

Last week, the U.S. Department of Justice (DOJ) announced a False Claims Act settlement with MD2U Holding Company, a  home healthcare company with operations in a number of states, after the company admitted a tremendous amount of Medicare fraud, to the point that the company was labeled by the DOJ as an “extreme outlier.”

According to the DOJ’s announcement, investigators found that 98 percent of the Medicare claims filed by the company between July 1, 2007 and Nov. 30, 2014 were falsely billed to Medicare, The company has admitted to violating the False Claims Act and is now liable to the United States for around $21.5 million.

DOJ investigators found that the company, which specializes in home healthcare;

  • Submitted fraudulent bills for patients who were not homebound;
  • Repeatedly used the highest payment codes when a lower code was more applicable. For example, MD2U would send a non-physician to a patient to check on them, with the visit lasting less than 10 minutes, but the company would bill Medicare for a comprehensive medical visit;
  • Repeatedly and fraudulently billed the government for visits deemed medically unnecessary and;
  • Cloned medical records in order to justify patient visits. For example, MD2U non-physicians would often use an electronic medical record system to copy and paste notes from previous medical visits, so that they could bill for a comprehensive medical examination visit.

In filing its formal complaint, the DOJ called MD2U “an extreme outlier in its frequency of billing the highest level … codes when compared to other Medicare providers in Kentucky, the states in which it operates, or nationally.”

According to the consent judgment, MD2U and its owners, President and CEO J. Michael Benfield, Chief Information Officer Greg Latta and Chief Operations Officer Karen Latta, will be able to pay down the $21.5 million they now owe by paying $3.3 million first, and then paying the rest as a percentage of their net income over the next five years. In addition, every officer of the company has promised to enter into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services’ Office of Inspector General. They also face 50 percent fees to the government on any monetary transfers from MD2U to company officers, outside of their normal salaries and business expense reimbursements, as well as from any proceeds they receive from the sale of any equity stake in MD2U.

This case, as in most cases of this kind, was brought based on the whistleblower provisions of the False Claims Act, which grants authorization to a private party to sue on behalf of the United States. The best part is, it also allows the whistleblower to participate in the recovery that is made. The whistleblower for this case has not been identified as yet, but they are likely to receive millions from a settlement of this size.

Most cases brought by the DOJ under the False Claims Act come about because someone saw something and came forward as a whistleblower. By doing so, such whistleblowers may be entitled to substantial compensation from the government’s restitution. If you have knowledge of any instances of Medicare or Medicaid fraud, or fraudulent actions by a government contractor, or any other activity that may fall under the False Claims Act, please contact the False Claims Act Attorney atThe Hill Law Firm as soon as possible, so that we can help you put a stop to the fraud and get what you deserve.

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