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Nashville Medicare Supply Co.to Pay More Than $19.3 M - Qui Tam Team

Nashville Medicare Supply Co.to Pay More Than $19.3 M

 

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U.S. District Judge William J. Haynes, Jr., held that defendants exhibited reckless disregard of the legal mandates of the applicable Medicare statutes and regulations, and further noted that complaints and concerns were raised by Renal Care Group employees about the operation and Medicare billing activity of the Renal Care Group Supply Company.  The court’s opinion cites one employee who wrote “I do not wish to go to jail” and felt the company’s plan “was not in the best interests of patients” after receiving a corporate directive about converting patients into the Renal Care Group Supply Company.  The Court’s Order further notes that Renal Care Group failed to heed the advice of the company’s lawyers when operating the supply company, and discussed an internal audit of the supply company that found that one hundred percent of the company’s files were missing information that Medicare required for billing the government program.  The court held that reckless disregard is sufficient for liability under the federal False Claims Act, and that specific intent to defraud is not required.

“The U.S. Attorney’s office is committed to vigorously pursuing Medicare providers who fraudulently seek and retain payment from the Medicare program,” said U.S. Attorney Edward M. Yarbrough.  “There will be no tolerance for those who voluntarily seek to provide services to Medicare beneficiaries but then take taxpayer money from the Medicare program to which they are not entitled.  Those who do will be discovered, and the United States will seek treble damages, interest on the amount owed, and the medical providers may be subject to exclusion from the Medicare program.”

“These investigations and their outcomes protect the tax payer from waste, fraud and abuse,” stated Special Agent in Charge, Gary M. Holst of the Kansas City Regional Office of Inspector General for the Department of Health and Human Services.  “We will continue to aggressively pursue those who seek to defraud the Medicare and Medicaid programs.”

Renal Care Group (RCG) was a publicly traded for-profit corporation and dialysis provider until it merged with dialysis industry competitor Fresenius Medical Care (FMC).   RCG had its principal place of business in Nashville, Tenn., but operated numerous facilities in multiple states, including facilities in the St. Louis area where the case originated.  In August 2009, at the request of the defendants, a federal district court judge in St. Louis transferred the case to the Middle District of Tennessee.

FMC now owns and operates RCGSC and RCG’s dialysis facilities after the merger with RCG.  Renal Care Group was in the business of providing renal dialysis and related services to patients with End-Stage Renal Disease (ESRD).  ESRD is a life threatening condition in which a patient’s kidneys are unable to remove toxins from the blood, thus necessitating some form of dialysis treatment.  This condition is often suffered by patients who have experienced chronic kidney disease over a period of time.  The government’s Medicare program generally provides coverage for ESRD patients.

The United States’ complaint alleged that between January 1999 and December 2005, RCGSC submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment.  The government alleged that all of these claims, as well as the related claims for support services rendered by RCG dialysis clinics, were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients.  Under federal law, the Medicare program pays companies that provide dialysis supplies to ESRD patients only if the companies that provide the supplies are truly independent from dialysis facilities and the ESRD patient chooses to receive supplies from the independent supply company.  The complaint alleged that defendants set up a sham billing company, RCGSC, that was not independent from RCG.  Further, RCG interfered with ESRD patients’ choice of supply options, requiring patients to “move” to RCGSC.    The court’s order cites employees’ and RCG’s counsel’s concerns regarding the arrangement, and held that defendants recklessly disregarded Medicare’s requirements for a condition of payment.  The court further found that defendants were unjustly enriched by their retention of the Medicare payments, and to allow RCG to retain the Medicare payments would undermine clear Congressional mandate and would be inequitable.

The case was investigated by the Department of Health and Human Services, Office of Inspector General, and the FBI.  The United States was represented by Andrew J. Lay, Assistant U.S. Attorney for the Eastern District of Missouri, Laurie Oberembt and John Henebery with the Civil Division of the U.S. Department of Justice, and Lisa Rivera, Assistant U.S. Attorney for the Middle District of Tennessee.

SOURCE U.S. Department of Justice

 
 
 

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