United States Recovers One Million Dollars in Connection with False Claims Act Allegations Relating to Skilled Therapy Services and Durable Medical Equipment

           GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that Agility Health, LLC (“Agility Health”) and Oceana County Medical Care Facility (“OCMCF”) have entered into agreements to pay the federal government a total of $1,000,000 to resolve allegations that they submitted false claims to Medicare, or caused false claims to be submitted to Medicare, in violation of the federal False Claims Act. Agility Health, a Grand Rapids-based company that manages or provides health care services at inpatient and outpatient sites in twenty states, will pay a settlement amount of $850,000. OCMCF, a county-owned facility that provides inpatient and outpatient rehabilitation services in Hart, Michigan, will pay a settlement amount of $150,000. Neither Agility Health nor OCMCF admitted liability as part of their settlements.

          Beginning in 2008, Agility Health managed OCMCF’s therapy department, provided therapy staffing services at OCMCF, and assisted OCMCF in preparing insurance claims for therapy services. The settlements announced today resolve allegations that between January 1, 2009 and December 31, 2013, Agility Health knowingly caused false claims to be submitted to Medicare, and OCMCF knowingly submitted false claims to Medicare, for inpatient skilled therapy services that were not provided, that were upcoded, and that were medically unnecessary. According to the United States, Agility Health and OCMCF billed Medicare or caused Medicare to be billed for, among other things, services that were purportedly rendered to patients who were mentally and physically unable to participate in therapy programs.

          The settlement with Agility Health also resolves allegations that during its tenure at OCMCF, Agility Health caused false claims for durable medical equipment to be submitted to Medicare. According to the United States, an Agility Health employee at OCMCF improperly disclosed protected health information to an outside vendor in 2011 in violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). The vendor used that information to bill Medicare for unnecessary medical equipment that some patients never received.

          This case resulted from a civil lawsuit filed by three whistleblowers who worked at OCMCF. The lawsuit, known as a qui tam action, was filed under the False Claims Act, which allows private whistleblowers to bring lawsuits on behalf of the United States and receive a share of any recoveries. In this case, the Government intervened in the whistleblowers’ lawsuit. The whistleblowers will collectively receive over $200,000 of the settlement proceeds, as well as additional amounts for attorney’s fees and costs. The qui tam case is docketed as United States, et al., ex rel. Jahn, et al. v. Agility Health, Inc., et al., No. 1:12-cv-449 (W.D. Mich.).

          “Patients in skilled nursing facilities should receive therapy based on their clinical needs, not the financial incentives of the companies and facilities that provide their care,” said U.S. Attorney Miles. “Patients also trust providers to protect their sensitive personal information as required by law. My office will use all available options to hold providers accountable when they improperly disclose protected health information.”

          This case was investigated by the U.S. Attorney’s Office for the Western District of Michigan. Assistant U.S. Attorney Adam B. Townshend represented the United States.

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