Tennessee Home Health Company Settles False Claims Suit

The Justice Department reported that a home health agency, CareAll Management LLC, has agreed to settle a whistleblower’s qui tam lawsuit alleging it upcoded patient billings submitted to Medicare and Medicaid in violation of the False Claims Act. According to its website, CareAll is one of the largest providers of home health services in Tennessee with 25 locations throughout the state.

In 2012, the former director of services for CareAll’s Knoxville office and a registered nurse, Toney Gonzales, filed a whistleblower action under the qui tam provisions of the False Claims Act. In his lawsuit, Mr. Gonzales alleged that CareAll and its affiliates, overstated the severity of home healthcare patients’ conditions and knowingly submitted upcoded billings to government healthcare programs such as Medicare and Medicaid. Upcoding is defined as the practice of assigning an inaccurate billing code to a medical procedure to increase reimbursement to the medical provider.

In addition, the whistleblower’s complaint also alleged that CareAll provided home health services that were not medically necessary. Medicare and Medicaid will only pay for home healthcare services that are medically necessary.

According to the complaint, the wrongdoing occurred from 2006 to 2013. The government contended that the upcoded billings and invoices for services that were not medically necessary were false submissions made in violation of the federal and Tennessee False Claims Act. CareAll, agreed to pay $25 million to the federal government and the state of Tennessee to settle the whistleblower’s claims.

In 2012, CareAll settled another False Claims Act lawsuit alleging that CareAll and its affiliates knowingly submitted falsified cost reports for fiscal years 1999, 2000 and 2001 to support their Medicare billings. The United States alleged that the cost reports were false because they knowingly hid the relationship between the management company and the home health agencies. CareAll previously paid $9.38 million to settle those allegations.

In addition to the monetary payment, CareAll agreed to be bound by a corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General.

Of the $25 million settlement amount, the whistleblower Tony Gonzales will receive approximately $3.9 million as his reward under the qui tam provisions of the False Claims Act.

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