Vibra Healthcare Pays $32.7 Million to Settle Medically Unnecessary Services False Claims Allegations

The Department of Justice recently announced that Vibra Healthcare, LLC (Vibra), a hospital provider headquartered in Mechanicsburg, Pennsylvania, agreed to $32.7 million, to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services.  Vibra’s specialty hospitals treat medically complex patients who suffer from major orthopedic, neurologic, stroke, multiple traumas, cardiac and respiratory conditions. Vibra and its affiliates currently own and operate 36 long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states.

Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.

The allegations were originally filed under the whistleblower provisions of the False Claims Act by Sylvia Daniel who was a former health information coder at Vibra Hospital of Southeastern Michigan.  The Government intervened in the case and alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.  In addition, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

“Medical necessity is fundamental if health providers wish to claim taxpayer funds for medical care,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “OIG is committed to protecting precious Medicare dollars and ensuring that beneficiaries receive quality, necessary long term care.”

Our law firm previously represented a successful whistleblower against Select Medical Corporation, resulting in a $7.5 million settlement. Our client alleged and the Government intervened in her allegations involving illegal referral arrangements and excessive fee arrangements under Medical Director Agreements between Select Medical Corporation and certain physicians who were parties to such agreements in violation of the federal Anti-Kickback Statute.  Specifically, the United States and the covered conduct in the settlement agreement contended that Select Medical Corporation (1) knowingly presented or caused to be presented false or fraudulent claims for payment or approval to the United States for services rendered to Medicare patients who were unlawfully referred by Directors retained at Select’s Ohio LTACH facilities under agreements in effect between January 1, 2003 through December 31, 2006 and (2) entered into prohibited financial relationship with the Directors at Select’s Ohio LTACH facilities that were in effect between January 1, 2003 through December 31, 2006 and made illegal payments to these Directors under those relationships in violation of the Stark law during the period from January 1, 2003 through December 30, 2006; and (3) entered into prohibited financial relationships with Directors retained by Select Ohio LTACH facilities that were in effect between January 1, 2003 through December 21, 2006 and made illegal payments in excess of fair market value under those relationships.

Select Medical Corporation operated over 110 LTACHs nationwide located in 28 states.  As part of the settlement, Select Specialty Hospital System entered into a Corporate Integrity Agreement that mandated strict reporting and monitoring requirements.

Our law firm in interested in representing whistleblowers with knowledge of violations of the False Claims Act including violations of the law involving hospitals and hospital systems nationwide.