Houston Texas Business Lawyer

Whistleblower Helps Identify Nursing Home Fraud

Nursing homes that provide rehabilitative services are often paid by Medicare, while many other nursing homes are paid by Medicaid. Because Medicare and Medicaid are government funded insurance for the elderly and the poor respectively, taxpayers are on the hook when claims are made to Medicare or Medicaid. If a nursing home or a care provider within the nursing home environment submits fraudulent claims, this can result in taxpayers losing money when the government pays out claims for services that were not performed or not necessary.


Rooting out fraud in nursing homes and rehab centers throughout the country is difficult because there are so many patients receiving care and so many claims made. One of the most important ways that fraud is identified is through qui tam lawsuits filed by whistleblowers. The Federal False Claims Act gives whistleblowers who identify fraud against the government the opportunity to file qui tam lawsuits to bring this fraud to light.

When the civil lawsuit is filed by a whistleblower, the government can intervene or the whistleblower can see the case through to the end. If the case settles or a decision is reached on behalf of the plaintiff, the government recovers funds paid out due to fraud and the whistleblower gets to keep a portion of the money recovered. When the government gets large settlements, the whistleblower gets to keep a lot of money. As a result, anyone who suspects they have identified false claims being made against the government should consult with an experienced whistleblower attorney for help.

Just recently, there was an example of a settlement involving a nursing home therapy provider that demonstrates the tremendous benefits of qui tam lawsuits in helping the government to find fraud.

Nursing Home Therapy Provider

According to AP, the largest provider of nursing home rehabilitation therapy services was named as a defendant in a qui tam lawsuit. The provider, RehabCare, was accused of submitting false claims to Medicare for therapy services that were unreasonable, that were unnecessary, and that were never provided. There were also four nursing homes working with RehabCare that were also involved in submitting false claims and that were also identified in the whistleblower lawsuit.

The case was first filed in federal court in December 2012 by former employees of RehabCare. The former employees claimed firsthand knowledge of the fraud that was occurring. The fraud reportedly occurred before October 1, 2011.

RehabCare agreed to settle the allegations of fraud, paying $125 million to resolve allegations that it improperly billed for therapy. The government also reached settlements with others involved in submitting false claims, settling for $3.9 million with Wingate Healthcare and 16 of Wingate's nursing facilities, and settling for $1.375 million with Essex Group Management and two of its homes. The government, and taxpayers, have now recovered all of this money thanks to the efforts of whistleblowers who took the initiative to come forward.