July 19, 2018

Settlement Comes After Whistleblowers Allege Patients Were Subjected to Unreasonable and Unnecessary Treatments  

PHILADELPHIA – Operators of a chain of skilled nursing facilities in Florida and Alabama have agreed to pay $10 million to the United States government to resolve False Claims Act charges filed by three whistleblowers who allege that the facilities illegally billed Medicare for rehabilitation therapy services that were medically unreasonable and unnecessary. The settlement comes amid increased emphasis in recent years on the part of the Department of Justice on pursuing fraud and quality of care issues with respect to long term care providers.

The whistleblowers, represented by national plaintiffs' law firm Cohen Milstein Sellers & Toll PLLC, filed the lawsuit in 2013 in the United States District Court for the Southern District of Alabama against the settling defendants, including Southern SNF Management, Inc. and Rehab Services in Motion, LLC, as well as numerous individual skilled nursing facilities. The whistleblowers alleged a multi-year scheme to fraudulently increase the facilities’ Medicare revenues by assigning Medicare patients to levels of therapy far greater than medically appropriate and billing Medicare at the higher amounts associated with this unnecessary therapy.  The claims resolved by this settlement are allegations only and there has been no determination of liability.

“This settlement demonstrates that by using the False Claims statute, regular citizens can be a force for good if they learn that their employer is defrauding the Government and want to assist the Government in pursuing the wrongdoers,” said one of the whistleblowers. “We are thankful for the Government’s work in this case and believe the settlement will help protect both taxpayers and the patients of these facilities.”

The federal government intervened on June 20, 2018 in certain claims made in the whistleblowers’ complaint, and settled with the defendants on July 13, 2018. The whistleblowers were all employees at one of defendants’ skilled nursing facilities, where they learned of the alleged scheme. The whistleblowers together will receive an award of $2 million as part of this settlement. 

“We’re proud to represent such brave, principled clients and to have worked with the Government team who for years diligently investigated, assembled, and prosecuted this complex case,” said Jeanne Markey, Partner at Cohen Milstein and lead counsel for the whistleblowers. “The excellent result shows that the False Claims Act continues to function exactly as it should—incentivizing people who witness fraud against the Government to work with the Government to seek and obtain justice.”

The federal False Claims Act and its state law equivalents permit private citizens to bring lawsuits on behalf of the government against persons who submit or cause to be submitted false or fraudulent claims for payment under government contracts or programs, such as Medicare.  Whistleblowers, like the three individuals who brought this lawsuit, are entitled to receive a portion of the proceeds of any settlement or judgment awarded against a defendant.

Joining Jeanne Markey representing the whistleblowers in this case is Cohen Milstein partner Gary Azorsky, who with Markey serves as co-chair of the Cohen Milstein Whistleblower/False Claims Act practice group.  The whistleblowers are also represented by Raymond Sarola and Casey Preston of Cohen Milstein, and Sarah Hubbard of the Hubbard Law Firm.

The press release issued by U.S. Department of Justice can be accessed here.

About Cohen Milstein

Cohen Milstein Sellers & Toll PLLC is recognized as one of the premier law firms in the country handling major, complex plaintiff-side litigation. With more than 90 attorneys, Cohen Milstein has offices in Washington, D.C., Chicago, Ill., New York, N.Y., Palm Beach Gardens, Fla., Philadelphia, Pa. and Raleigh, N.C. For additional information, visit www.cohenmilstein.com or call 267.479.5700.


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