Certain Tennessee residents and home healthcare providers have agreed to a $9.375 million settlement with the federal government to resolve a 2009 False Claims Act lawsuit. The Justice Department alleged that the defendants violated the False Claims Act by causing Medicare to pay too much based on a mistake in fact.
Alleged Medicare Fraud Prompted False Claims Act Lawsuit.
From 1999 to 2001, James W. Carell and a number of related CareAll entities allegedly failed to disclose in their cost reports the relationship between them and their management company. According to court documents, if that disclosure had been made, as it should have been, the management company’s services would have been reimbursed by Medicare at a lower rate.
James Carell owned the management company during the relevant years, and Mr. Carell’s friend Robert Vining serviced as a “sham” owner of the various home healthcare agencies. Mr. Carell’s management company allegedly exerted substantial control over the various home healthcare companies and profited from the “sham” ownership structure that he set up. Mr. Carell compensated Mr. Vining for his part in the scheme.
Simply by failing to report the relationship between the entities, the defendants allegedly defrauded the Medicare program of millions of dollars.
Whistleblowers Have Vital Role In Enforcing The False Claims Act.
The False Claims Act explicitly provides for the participation of whistleblowers. Because they are vital to federal authorities’ fight on Medicaid and Medicare fraud, for example, the qui tam provisions of the False Claims Act provide that a whistleblower can file a lawsuit against the wrongdoers and share with the government in any recovery.