Home healthcare provider Carter Healthcare and its former chief executive officer and chief operations officer agreed to pay more than $30 million total under two settlements alleging the parties engaged in kickbacks to doctors and filed false claims.
In each settlement announced Tuesday, the Department of Justice (DOJ) charged Carter Healthcare, also known as CHC Holdings, with violating the False Claims Act. Both cases were initially brought in qui tam lawsuits by private individuals suing on behalf of the U.S. government.
Carter Healthcare and the executives agreed to pay a total of $22.9 million to settle a lawsuit originally filed in 2017 in U.S. District Court for the Western District of Oklahoma. The suit alleged between 2013-20, Carter Healthcare CEO Stanley Carter and COO Brad Carter arranged for payments to certain medical directors in Oklahoma and Texas who referred their Medicare or TRICARE patients to the company.
Carter Healthcare and the executives agreed to be excluded from participating in any federal health programs for five years. The company also entered into a five-year corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, under which it must hire an independent review organization to oversee any arrangements it makes with physicians and others, the DOJ said.
The agency did not disclose how much the whistleblowers would receive from the settlement total.
Carter Healthcare, its Florida affiliate, and the same two former executives collectively agreed to pay more than $7.1 million to settle a separate lawsuit originally filed U.S. District Court for the Southern District of Florida by two former therapists at the company.
The suit alleged between 2014-16, Carter Healthcare violated the False Claims Act by billing Medicare for medically unnecessary therapy. The company “upcode[d]” patients’ diagnoses to make them appear more serious and costly to treat, the DOJ alleged.
“These overpayments drain the Medicare trust fund and unfairly raise the premiums our senior citizens must pay,” said Juan Antonio Gonzalez, U.S. attorney for the Southern District of Florida, in a press release.
Bradley Carter will pay $175,000, Stanley Carter $75,000, and Carter Healthcare $6.925 million to settle the Florida allegations. The two former therapist whistleblowers will together receive $1.3 million.
Carter Healthcare agreed to a corporate integrity agreement in the Florida case as well, under which it must “implement compliance measures designed to avoid or promptly detect conduct similar to that which gave rise to the settlement,” the DOJ said.
“While Carter Healthcare does not believe it did anything wrong and continues to deny all of the government’s allegation [sic], the company entered into this settlement with the federal government to avoid the significant expense of protracted litigation and allow the company’s focus to remain on providing high-quality home healthcare to our patients as we have done for more than 33 years,” said Carter Healthcare President Justin Carter in an emailed statement.
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