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The US DOJ announced on February 8, 2020, that Diversicare Health Services agreed to settle charges it violated the False Claims Act by submitting false bills to Medicare. The bills were for rehabilitation therapy services there weren’t necessary, weren’t reasonable, and weren’t performed by skilled personnel – according to the DOJ.

The settlement was based on the company’s ability to pay. The lawsuits were brought through the qui tam provisions of the False Claims Act by two whistleblowers. One whistleblower will receive $1.4 million for her disclosure. The other whistleblower will receive $145,350.

The settlement also resolves complaints that the health company “submitted forged pre-admission evaluations of patient need for skilled nursing services to TennCare.” TennCare is Tennessee’s Medicaid program. Diversicare is located in Tennessee and has about 74 nursing and rehabilitation services throughout the United States.

False Claims Act cases help ensure that patients who use Medicare or Medicaid are being treated according to what’s best for their medical needs and not for the financial profits of the health providers and health companies. Most nursing homes including those in California rely on patients who are eligible for Medicare or Medicaid.

The false claims scheme

The DOJ states that for nearly six years, the practice of Diversicare was “designed to place as many beneficiaries in the highest level of Medicare reimbursement — Ultra High — irrespective of the individual clinical needs of the patients. These profit-driven policies and practices resulted in the provision of unreasonable, unnecessary, and unskilled therapy to many beneficiaries in Diversicare’s skilled nursing facilities.”

The DOJ claimed that the nursing home company submitted claims for the Ultra High level even though there wasn’t evidence that:

  • The duration and frequency of the various occupational and physical therapies were necessary or reasonable
  • The intensity of therapy was appropriate for the patient
  • The services could be done by someone who didn’t have the requisite therapy skills
  • Speech therapy was required

Many other instances of improper or unnecessary treatment were also asserted by the DOJ such as “extending patient lengths of stay beyond what was medically indicated” and using quotas to ensure Ultra High Therapy was maximized.

The settlement also requires that Diversicare agree to a five-year Corporate Integrity Agreement requiring a risk assessment program be implemented and other compliance requirements.

The California Law Offices of Stephen A. Danz and Associates has been fighting for employees for nearly 40 years. We have a strong track record of success in filing False Claims Act cases and helping whistleblowers get their just percentage of fraudulent recoveries. To review your False Claims Act case, call us at 877-789-9707 or fill out our online contact form. Se habla espanol.