Headlines that Matter for Companies and Executives in Regulated Industries
Home Health Care Company to Pay $3 Million to Resolve FCA Allegations
The US Department of Justice (DOJ) announced that Saad Enterprises Incorporated, operating as Saad Healthcare, agreed to pay $3 million to resolve allegations that it knowingly submitted false claims for Medicare hospice benefits despite patients not being terminally ill. The settlement resolves a lawsuit originally filed under the qui tam provisions of the False Claims Act (FCA). The relators will receive $540,000 as part of the settlement.
Medicare patients are only eligible for hospice care if they are “terminally ill,” which means a patient, without traditional treatment, has a life expectancy of six months or less. According to the DOJ, between 2013 and 2020, Saad knowingly submitted hospice related Medicare claims for 21 patients who were not terminally ill and thus were not eligible for Medicare hospice benefits.
Acting US Attorney Keith A. Jones for the Southern District of Alabama stated, “caring for terminally ill people is a responsibility the United States and the Medicare program take seriously.” “Patients and taxpayers deserve not to be cheated, and the Department of Justice will continue to protect them.”
The case resolved by this settlement is captioned United States ex rel. Wolff & Sims v. Saad Enterprises, Inc., Case No. 1:19-cv-00040 (S.D. Ala.). The DOJ’s press release can be found here.
DOJ Files FCA Suit Against Skilled Nursing Company and Executives for Fraudulent Billing
On February 19, the US Attorney’s Office for Massachusetts (USAO) and the Massachusetts Attorney General filed a joint intervening complaint against 19 skilled nursing facilities, their former and current management companies, RegalCare Management Group, LLC, and RegalCare Management 2.0, RegalCare’s owner, an executive, and RegalCare’s therapy consultant alleging Medicare and Medicaid billing fraud. The suit was originally brought by a whistleblower under the qui tam provisions of the FCA.
According to the DOJ’s complaint, between 2017 and 2023, the defendants allegedly “engaged in systematic billing fraud to cheat Medicare and Medicaid and increase their profits.” RegalCare’s owner, executive, and therapy consultant allegedly directed claims to be submitted to Medicare and Medicaid for expensive, medically unreasonable, and medically unnecessary services provided to patients at RegalCare’s skilled nursing facilities (SNFs). More specifically, RegalCare’s executive team allegedly submitted claims for the highest level of skilled rehab therapy service at the SNFs, despite patients not needing the services, and altered patient records to support billing for the services.
The case is captioned United States. and Commonwealth of Massachusetts ex rel. Michelle McCormick v. RegalCare Management 2.0, LLC, et al. (Docket No. 20-cv-11805-IT). The government’s complaint can be seen here, and the USAO press release regarding the complaint can be found here.
Connecticut-Based Chemical Company Settles PPP-Related FCA Claims
The DOJ announced that MacDermid Incorporated, a Connecticut-based chemical manufacturing and distribution company, settled allegations that it violated the FCA by falsely certifying its eligibility to receive a Paycheck Protection Program (PPP) loan. MacDermid agreed to pay over $2.2 million, which includes the relator’s share of the recovery, to resolve the allegations.
According to the DOJ, in April 2021, MacDermid’s predecessor, Coventya Incorporated, applied for a second-draw PPP loan, certifying its eligibility because the company had fewer than 300 employees. Subsequently, the company sought and received forgiveness for over $1 million in principal and interest. The DOJ alleged that with the company’s foreign affiliate, Coventya had more than 300 employees and thus falsely certified that it was eligible for the PPP loan.
In the DOJ’s press release, Acting United States Attorney for the District of Connecticut, Marc H. Silverman, stated that the Connecticut office is “is committed to pursuing those who violated the requirements of pandemic assistance programs and holding them accountable.”
The case resolved by this settlement is United States ex rel GNGH2 Inc. v. MacDermid Incorporated, (Docket No. 3:24-cv-1480).
The DOJ’s press release can be found here.
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