Kyros Law Represents Whistleblower in Medicare False Claim Suit that Settles for $25 Million

A whistleblower represented by Kyros Law has brought down a Medicare Fraud scheme spanning the entirety of home health staffing company CareAll Home Care Services, L.L.C., in a case that has settled for $25 million. The U.S. Department of Justice revealed in November 2014 that the Tennessee-based company will be paying out on the basis of the whistleblower’s False Claims Act suit.

The whistleblower, Toney Gonzales, a nurse who was formerly employed by CareAll, alleges that the company billed Medicare according to its desired profit margins, whether or not the services rendered were needed or relevant to the patient. He claims that after he refused to authorize home health services he deemed unnecessary, CareAll demoted him. For his role in uncovering the scheme, Gonzales stands to receive almost $4 million.

Along with Kyros Law, Gonzales was represented by Milberg LLP, Sanford Heisler LLP and Provost Umphrey Law Firm LLP

Gonzalez alleged that the misconduct was spanning all levels of the company. According to him, CareAll’s activities weren’t limited to specific locations or rogue employees, but could instead be attributed to corporate policies that were formulated by executives on the highest company levels.

By order of the company’s highest echelons, directors of CareAll’s 34 branches were mandated to attain a profit margin of at least 25 percent per patient. To achieve this, branch directors received a predetermined combination of physical therapy and nursing procedures to be billed that frequently did not match the true needs of the patients served. Gonzalez alleged that senior staff members instructed him to apply a predefined case mix universally unless it was clearly impossible to do so. Missing from the predetermined combinations were assessments to determine whether the patients actually needed the procedures for which CareAll was billing.

An example Gonzalez provided was that CareAll diagnosed patients with gastroesophageal reflux disease if the staff member saw the patient take or even possess over-the-counter antacids. This allowed CareAll to bill for “a high-paying diagnosis.”

This isn’t the first time CareAll has come under scrutiny. Two years earlier, CareAll paid out $9.5 million on a False Claims Act suit alleging that the company submitted false costs reports. The Department of Justice is now requiring the company to enter into what it dubs “an enhanced and extended corporate integrity agreement” in the intention of preventing future compliance failures and potential fraud.

CareAll claims that the extensive billing problems were partially due to the complex regulations used by Medicare , which contributed to the number of “innocent mistakes.” However, the company acknowledged that there were also some “compliance issues” and “noncompliant billings.”

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