A California company that runs 35 skilled nursing facilities and two of its executives have agreed to pay $30 million to settle claims that they violated the False Claims Act (FCA) by billing Medicare and Tricare for medically unnecessary services. North American Health Care Inc. (NAHC) has agreed to pay $28.5 million and enter into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services’ Office of Inspector General for the alleged misbilling to Medicare and Tricare, a Defense Department health program. The company’s chairman, John Sorenson, will pay $1 million, and Margaret Gelvezon, the senior vice president of reimbursement analysis, will pay $500,000.
NAHC runs 35 skilled nursing facilities, largely in California, where it provides inpatient services including physical, occupational and speech therapies. From Jan. 21, 2005, through Oct. 31, 2009, the facilities provided unnecessary services and then asked the federal health care programs to cover the costs, the government alleges. The practice then continued in three facilities, which lie in the Northern District of California, through Dec. 3, 2011, the government said. Gelvezon was the one who created the scheme, and Sorensen reinforced it, the government alleged. Principal Deputy Assistant Attorney General Benjamin C. Mizer said in a statement:
Medicare patients and those insured by Tricare are entitled to receive care necessary for their clinical needs and not the financial needs of their health providers. Health care providers will be held accountable if they bill for unnecessary services or treatment.
Under the corporate integrity agreement, all NAHC facilities must have their billing for therapy services reviewed annually by an independent organization.
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