For-profit home health provider Carter Healthcare LLC, along with its affiliates CHC Holdings and Carter-Florida (collectively Carter Healthcare), their President Stanley Carter and Chief Operations Officer Bradley Carter will pay $7.175 million to settle allegations that they violated the False Claims Act by overbilling the Medicare program. The settlement resolves allegations filed in qui tam, or whistleblower, lawsuits by Sharon Mahaffey and Mark Brimer, both therapists who were formerly employed by Carter Healthcare.
The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs. According to the U.S. Department of Justice (DOJ) press release, Mahaffey and Brimer will jointly receive $1.3 million of the settlement.
Allegedly, between 2014 and 2016 Carter Healthcare “billed the Medicare Program knowingly and improperly for home healthcare to patients in Florida based on therapy provided without regard to medical necessity and overbilled for therapy by upcoding patients’ diagnoses.” For the settlement, “Bradley Carter will pay $175,000, Stanley Carter will pay $75,000, and Carter Healthcare will pay the remaining $6.925 million.”
As part of the settlement, “[b]oth Stanley Carter and Bradley Carter agreed to be excluded from participation in all Federal health care programs for a period of five years pursuant to 42 U.S.C. § 1320a-7(b)(7), the statutory authority to exclude from federal health programs individuals or entities who engaged in fraud or kickbacks.” Carter Healthcare will also be “bound by the terms of a corporate integrity agreement with the Department of Health and Human Services – Office of Inspector General that requires the company to implement compliance measures designed to avoid or promptly detect conduct similar to that which gave rise to the settlement.”
The press release also states that Carter Healthcare will resolve another qui tam action to the tune of $22,948,004.54. This lawsuit was brought in the Western District of Oklahoma and “alleged that Carter Healthcare improperly paid remuneration to its home health medical directors in Oklahoma and Texas for the purpose of inducing referrals of Medicare and TRICARE home health patients between 2013 and 2020.”
The DOJ highlights the efficacy of the False Claims Act in the fight against health care fraud in announcing Carter Healthcare’s settlement. Indeed, whistleblowers are critical to uncovering waste, fraud, and abuse in the medical and health care industry: fraudulent schemes can be particularly harmful to patients and erode trust in the medical system. In Fiscal Year 2021, qui tam whistleblowers helped the DOJ recover $1.6 billion in settlements. The DOJ highlighted health care fraud as “the leading source of the department’s False Claims Act settlements and judgments.”
Senator Chuck Grassley (R-IA), who has been consistently championed as the “patron saint” of whistleblowers, proposed amendments to the False Claims Act in 2021 that would strengthen protections for whistleblowers and clarify existing law. The amendment was widely supported by whistleblower organizations and advocates. However, WNN sources discovered that the pharmaceutical lobby intervened with the amendment’s passage. The National Whistleblower Center (NWC) is urging Congress to protect the False Claims Act: learn more here.
Read the press release about Carter Healthcare here.