Health Law Daily Wrap Up, FALSE CLAIMS ACT—SETTLEMENT AGREEMENTS: Provider of chronic care services agrees to pay $14.9 million to settle allegations that it submitted false claims, (Jun 11, 2024)

By Melanie Hirschfelder, J.D.

The provider also entered into a five-year compliance agreement requiring it to submit Medicare claims for independent review of adherence to reimbursement guidelines.

A company that provided health care and disease management services to chronic care patients will pay nearly $15 million to settle allegations that it submitted false claims for reimbursement to Medicare, Medicaid, and TRICARE, the U.S. Department of Justice recently announced. The case began after a former employee brought a qui tam action pursuant to the False Claims Act (FCA), 31 U.S.C. §3730(b), and Florida and Minnesota state law, alleging that the provider of primary and geriatric health care services to residents of assisted living facilities, group homes, and memory care units knowingly submitted claims for two Evaluation and Management reimbursement codes, although the services provided did not meet federal guidelines (Settlement Agreement, May 28, 2004).

The HHS Office of Inspector General (OIG) accused the health care provider of submitting claims for the domiciliary rest home visit code for established patients (99337) and for the chronic care management code (99490), which were not provided in conformity with applicable Medicare, Medicaid, and TRICARE requirements. In settling the charges of alleged improper billing and inflated reimbursement claims, the health care provider specifically denied the government’s allegations that its actions were the result of fraud.

The total amount of the settlement is $14.9 million, plus interest, with $1.05 million being split between the states of Florida and Minnesota, and $2.8 million going to the relator who first brought the qui tam action. The bulk of the settlement amount – over $13.3 million – comes from the suspension by CMS of certain Medicare payments to the health care provider after it determined that credible allegations of fraud existed.

In addition to paying a monetary penalty, the health care provider must also enter into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG, requiring it to establish and maintain a compliance program meeting certain requirements. The CIA also requires it to submit to an Independent Review Organization’s review of the provider’s Medicare claims to determine whether such claims are medically necessary, appropriately documented, and correctly coded.

While the settlement agreement bars HHS-OIG from seeking to exclude the health care provider from participation in Medicare, Medicaid, and other federal healthcare programs, it makes certain exceptions, such as for liability arising under the tax code, a criminal statute, or outstanding Medicare debt. The provider, in turn, agrees not to resubmit any previously denied claims for reimbursement.

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