Nursing Facility Reaches Settlement in Medicare/Medicaid Fraud Case

A Northern Kentucky nursing home just reached an agreement with the U.S. Attorney’s office to pay a substantial settlement for false Medicare and Medicaid claims filed over the past decade. While this case concerns a nursing facility in Kentucky, it may have a significant impact on nationwide lawsuits under the False Claims Act (FCA) and nursing home issues in California.

According to a local ABC News article, the settlement requires that the owners of the health care facility pay the U.S. Government $350,000 in damages and that they retain an independent compliance consultant to ensure that these crimes are not repeated in the future. Lexington’s local news station, WTVQ, reported that this case represents the first lawsuit in Kentucky accusing a nursing home of violating the FCA by defrauding Medicaid and Medicare.

What is the False Claims Act and How Does it Relate to Nursing Home Abuse?

The Legal Information Institute describes the FCA as a document that holds persons and companies liable when they defraud government programs. Since Medicare and Medicaid programs are administered by the federal government, when nursing home facilities attempt defraud these programs, they become subject to the FCA.

To simplify, “defrauding” can mean any situation in which someone improperly receives payment from or avoids making required payments to the government program in question. An article in the California State Bar Association Newsletter remarked on the recent increase in Medicare and Medicaid fraud claims that fall under the FCA.

Case History

This case began in 2011, when the federal government filed a lawsuit against Villaspring Health Care and Rehabilitation, whose parent company is Carespring Health Care Management. The federal government argued that the defendants, Villaspring/Carespring, “failed to provide adequate care for the medically fragile and vulnerable elderly residents” of its facility. This resulted in “egregious harm” and even death to certain residents.

In addition to the significant neglect concerns, Villaspring/Carespring also defrauded the U.S. Government by filing Medicare and Medicaid reimbursement claims for patients and residents when it knew that the care for which it sought reimbursement was “either non-existent or so inadequate as to be worthless.” While individual residents and their loved ones might have claims against Villaspring/Carespring for the neglect in the nursing care facility, the federal government’s lawsuit concerns the fraudulent acts covered under the FCA.

According to the original complaint, the fraudulent Medicare and Medicaid claims were filed between 2004-2008 for services that “were not provided or rendered, were deficient, inadequate, substandard,” and generally failed to maintain or enhance the quality of life of the residents of Villaspring. In fact, the complaint alleged that the care provided was so poor that it “failed to meet professionally recognized standards of health care;” citing evidence of very serious harm to the residents, multiple incidents of abuse and neglect, and exceptionally poor living conditions.

Since the 2011 complaint, this case has been in the federal court system. When the government reached the settlement with Villaspring/Carespring, the U.S. Attorney General for the Eastern District of Kentucky, Kerry B. Harvey, indicated that she was “pleased to reach an agreement.” By making Medicare and Medicaid claims for services that were never provided, the owners of Villaspring/Carespring received payments from the federal government that they weren’t entitled to, and the recent $350,000 settlement results in the return of some of that money to the government programs that were defrauded.

Implications for California

This Kentucky case could have important implications in California, especially in connection to Medicare and Medicaid claims filed by the nursing facilities here. Are you concerned that your elderly parent or loved one is being neglected in a nursing facility? Our experienced attorneys can help. Contact us today to discuss your concerns about nursing home care in our state.

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Long-Term Care Hospitals Operate With Little Oversight
Elder Abuse Investigations: Coming Soon to a Care Center Near You

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