Guardian Elder Care Holdings and Related Entities Agree to Pay $15.4 Million to Resolve False Claims Act Allegations for Billing for Medically Unnecessary Rehabilitation Therapy Services

Guardian Elder Care Holdings Inc., and related companies Guardian LTC Management Inc., Guardian Elder Care Management Inc., Guardian Elder Care Management I Inc., and Guardian Rehabilitation Services Inc., (Guardian) agreed to pay $15,466,278 to resolve False Claims Act allegations that they knowingly overbilled Medicare and the Federal Employees Health Benefits Program for medically unnecessary rehabilitation therapy services, the Department of Justice announced today.  Guardian operates more than 50 nursing facilities throughout Pennsylvania, as well as in Ohio and West Virginia.

“Seniors rely on the Medicare program to provide them with appropriate care, and to ensure that they are treated with dignity and respect,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “The department will not tolerate nursing home operators that put their own economic gain ahead of the needs of their residents, and will continue to hold accountable those operators who bill Medicare for unnecessary rehabilitation services.”  

The settlement announced today resolve claims by the United States that from Jan. 1, 2011, through Dec. 31, 2017, Guardian caused certain facilities in Pennsylvania, West Virginia, and Ohio to bill for patients at the highest level of Medicare reimbursement, when services at that level were not medically necessary and were influenced by financial considerations rather than resident needs.  These allegations were originally brought by two former Guardian employees, Phillipa Krause and Julie White, under the whistleblower, or qui tam, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to share in any recovery.  The whistleblowers in this case will receive approximately $2.8 million.

The settlement also resolves allegations voluntarily disclosed by Guardian that it had employed two people who were excluded from federal healthcare programs. As a result of its employment of these two excluded individuals, Guardian inappropriately received payment for ineligible services.

“Too much rehabilitation therapy can actually harm patients, just like giving them too many pills or too much medicine,” said U.S. Attorney William McSwain of the Eastern District of Pennsylvania.  “And of course it harms taxpayers who foot the bill for unnecessary treatment.  We thank Ms. Krauss and Ms. White for their role in bringing this alleged scheme to light.  We also commend Guardian Elder Care for telling us about its employment of the excluded providers.  It is in their best interest for companies to make voluntary disclosures and emphasize compliance going forward, as my office will take this sort of cooperation into consideration when determining an appropriate resolution.”

​“Billing federal healthcare programs for medically unnecessary rehabilitation services not only depletes these programs’ funds but also exploits our most vulnerable citizens,” said U.S. Attorney Scott W. Brady of the Western District of Pennsylvania.  “Our office will continue to aggressively pursue providers who take advantage of our seniors by putting financial gain ahead of patient care.”

“Protecting our beneficiaries from unnecessary services is a priority and we will not tolerate companies putting financial gain ahead of quality of care,” said Maureen R. Dixon, Special Agent in Charge, Office of the Inspector General-U.S. Department of Health and Human Services (HHS-OIG).  “HHS-OIG will continue to work with our partners at the Department of Justice and OPM-OIG to root out fraud, waste and abuse in the Medicare and Medicaid programs.”

“Subjecting vulnerable patients to unnecessary treatments for financial gain is unconscionable," said Deputy Assistant Inspector General for Investigations Thomas W. South, Office of the Inspector General-U.S. Office of Personnel Management (OPM-OIG).  "First and foremost, OPM-OIG prioritizes protecting Federal employees and their dependents from patient harm.  I am proud that we were able to work with our law enforcement partners to hold Guardian Elder Care accountable for their unscrupulous behavior.”

Contemporaneous with the civil settlement, Guardian agreed to enter into a chain-wide Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General.  Such agreements promote compliance and protect vulnerable nursing home residents.  

This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania and for the Western District of Pennsylvania; HHS-OIG; and OPM-OIG.  This case was supported by the Department of Justice’s Elder Justice and Nursing Home Initiative, which coordinates the department’s activities combating elder abuse, neglect, and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid, and other federal health care programs.  This case was also a product of the Elder Justice Task Force of the U.S. Attorney’s Office for the Eastern District of Pennsylvania that launched four years ago.  For more information about the Department’s Elder Justice Initiative and the Elder Justice Task Force, see https://www.justice.gov/elderjustice/. 

The case is docketed as United States ex rel. Krauss v. Guardian Elder Care Holdings, Inc., et al., Civil Action No. 3:15-cv-6850 (E.D. Pa.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.