Detroit Long-Term Care Facility to Pay Back Over $800K in Medicare Fraud Settlement
Frank, Haron, Weiner and Navarro, in collaboration with the United States Attorneys Office for the Eastern District of Michigan, has settled a false claims suit against SCCI Hospitals of America,Inc. (SCCI), a provider of specialized long-term acute hospital care (an “LTACH”), to recover $830,166 in payments allegedly misappropriated from Medicare.
The lawsuit was filed on May 18, 2005 by the law firm under the qui tam provisions of the federal False Claims Act (31 U.S.C. 3729 et seq.) on behalf of Teri Hall-Dutts, R.N., Robert Kuzina and Donna Rudolph, R.N., in the U.S. District Court for the Eastern District of Michigan in Case No. 05-40351. On July 26, 2006, Christine Paulus and Angela DeGrez, represented by Patricia Stamler of the Bloomfield Hills, Michigan law firm, Hertz Schram, filed a similar lawsuit in Case No. 06-13393. The cases were consolidated in September, 2007 and the settlement announced here resolves both cases.
The settled law suits claimed that, between October 1, 2004 and September 30, 2005, SCCI submitted claims to the Medicare Program for services provided by SCCI Detroit which were not medically necessary because they were provided beyond the date when the patient should have been discharged, or because the patient did not meet admission criteria for an LTACH. SCCI, headquartered in Houston, Texas, operates Long-Term Acute Care Hospitals in several states but the subject matter of the lawsuits were the operations of its facility in Detroit, Michigan. SCCI previously settled another suit in 2007 for $75 million for conduct from 1996-1999 involving numerous Texas locations.
The Relators will share an award of 20.5 percent of the settlement or $170,184.11. The defendant also agreed to pay $107,983.89 for Relators’ expenses and attorney fees. In settling the suit the defendant neither admitted liability nor did the government conclude that the claims were not well founded.
After the jump - why the FCA is crucial to combating fraud
The False Claims Act and similar state Acts, such as the Michigan Medicaid False Claims Act provides incentives to private citizens, called "relators", who discover fraud against the federal or state governments and who bring their information to the government and help pursue the defrauding entities. The qui tam provisions allow Relators to represent the interests of the government to seek damages and civil penalties for a violation of law, and if the action is successful, to receive a portion of the recovery is provided to the Relators.
The federal False Claims Act and its twenty-four state counterparts represent the most effective civil fraud-fighting tools the government has to protect the Medicare and Medicaid programs, where it is estimated by the FBI and other governmental agencies that fully 3-10 percent of the nearly $1 trillion annual expenditures are lost to fraud, waste and abuse.
Monica P. Navarro, Maro E. Bush and David L. Haron of Frank, Haron, Weiner and Navarro represented their Relators in this litigation in cooperation with Eastern District AUSA Leslie Wizner, whose dedicated and constant efforts led to this favorable resolution.
“Not only does fraud drive up the cost of health care for all of us, but schemes such as that alleged in these complaints threaten the integrity of the health care system and target the most vulnerable in our society—the elderly and poor,” said Navarro. “We are proud of our courageous clients and proud of the effort we all undertook to recover these funds and to deter future conduct by the defendant and others in the industry.”
