Three Medicare Companies Agree to Pay the Government $19.5 Million to Resolve False Claims Act Allegations

The government’s crackdown on Medicare fraud continues to net companies that allegedly choose profit over patient wellbeing. This was evidently the case when earlier this month, the Justice Department announced that Foundations Health Solutions Inc. (FHS), Olympia Therapy, Inc. (Olympia), and Tridia Hospice Care Inc. (Tridia) and two of their executives have agreed to pay approximately $19.5 million to resolve allegations that they submitted false claims for medically unnecessary rehab therapy and hospice services. “Clinical decisions should be based on patient needs rather than corporate profits,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Department’s continuing commitment to safeguarding patients and the Medicare system.” All three companies are based in Ohio.

FHS provides management services to skilled nursing facilities (SNFs), Olympia provided rehab therapy services to patients at SNFs and Tridia provides hospice care services. Brian Colleran and Daniel Parker – two executives who have agreed to pay a portion of the settlement – controlled or owned Provider Services Inc. (PSI), BCFL Holdings Inc. (BCFL), FHS, Olympia, and Tridia between 2008 and 2013. The settlement resolves allegations that from January 2008 through December 2012, Olympia and PSI/BCFL submitted false claims for unnecessary rehab services at 18 SNFs. The government further alleges that the claims caused therapy services to be provided at excessive levels in order to increase Medicare reimbursement.

Further, the government contends that from April 2011 through December 2013 Tridia submitted false claims to Medicare for hospice services that were provided to patients who had not received proper medical examinations or certifications. Finally, the settlement resolves allegations that from January 2008 through December 2012, Colleran and Parker solicited and received kickbacks from SNFs managed by PSI or BCFL to Amber Home Care LLC. “Medicare providers have a legal and moral obligation to provide only those services that are medically necessary and to ensure that claims seeking payment accurately reflect the services that are actually provided,”said Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG). “The misrepresentation or falsification of those claims not only violates provisions of the False Claims Act but the public’s trust. The OIG will continue to aggressively investigate allegations of potential violations of this nature.”

As part of the settlement agreement reached earlier this month, FHS and Colleran have entered into a five-year Corporate Integrity Agreement (CIA), with the HHS Office of the Inspector General (HHS-OIG). The CIA is designed to compel FHS and Colleran to take steps to avoid future fraud and abuse. The settlement resolves allegations that came about as a result of two lawsuits that were filed by Vladimir Trakhter, a former Olympia employee, and Paula Bourne and La’ Tasha Goodwin, former Tridia employees. The lawsuits were filed in Ohio federal court under the qui tam or whistleblower provisions of the False Claims Act. These provisions allow private citizens to sue on behalf of the federal government and to share in any recovery.  Mr. Trakhter will receive approximately $2.9 million and Ms. Bourne and Ms. Goodwin collectively will receive $740,000.