In Tennessee, major healthcare fraud is civilly and criminally prosecuted by the Western, Middle and Eastern United States Attorney’s Offices and the State’s own Medicaid Fraud Control Unit.
The federal government often accomplishes this task with the assistance of the Tennessee Medicaid Fraud Control Unit (MFCU). The MFCU takes the responsibility of stopping fraud very seriously and is often assisted in its efforts by the bravery and actions of whistleblowers.
Modeled after the federal False Claims Act, the Tennessee False Claims Act permits private citizens to bring qui tam actions on behalf of the State of Tennessee to recover treble damages and civil penalties. Tenn. Code Ann. § 4-18-101 et seq. and Tennessee Medicaid False Claims Act, Tenn. Code Ann. § 71-5-181 et seq.
The liability provisions of the Tennessee False Claims Act, Tenn. Code Ann. §4-18-103(a), provide liability for any person who:
(1) Knowingly presents, or causes to be presented to an officer or employee of the state…, a false claim for payment or approval;
(2) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false claim paid or approved by the state or by any political subdivision;
(3) Conspires to defraud the state or any political subdivision by getting a claim allowed or paid by the state of by any political subdivision.
§ 71-5-182(a)(1) provides liability for any person who-
(A) presents, or causes to be presented to the state, a claim for payment under the Medicaid program knowing such claim is false or fraudulent;
(B) makes or uses, or causes to be made or used, a record or statement to get a false or fraudulent claim under the Medicaid program paid for or approved by the state knowing such record or statement is false;
(C) conspires to defraud the State by getting a claim allowed or paid under the Medicaid program knowing such claim is false or fraudulent.
Cases completed in Tennessee that were originally brought in a Tennessee federal court include:
MedQuest Associates, Inc., BioImaging at Charlotte, Inc., BioImaging of CoolSprings, Inc., and BioImaging at Harding, Inc. were ordered to pay $11.1 million after the U.S. District Court for the Middle District of Tennessee granted summary judgment to the United States in a False Claims Act qui tam action. The companies submitted claims for payment to Medicare for diagnostic testing conducted without the required physician supervision, and caused the submission of false Medicare claims in which another Medicare provider’s billing number was improperly used.
DOJ announced that Gayle Rogers and the estate of her late husband, Tom Rogers, agreed to pay $15.25 million to settle allegations that he filed false claims with Medicare. The Government alleged that Tom Rogers and his management company, Alpha Medical Inc., submitted false claims to Medicare for the company’s fees for servicing a network that he created of home health agencies owned by his relatives, his best friend, and others who were indebted to him. Medicare would not have paid the fee if it had known about the relationships between the management company and the network. Medicare’s rule against paying fees which result in profit when there is a controlling relationship is designed to protect Medicare from unscrupulous demands for excessive fees.
Hill-Rom Company, Inc., a durable medical equipment supplier, agreed to pay the United States $41.8 million to resolve Medicare fraud allegations. Hill-Rom was alleged to have knowingly submitted numerous false claims to the Medicare program for certain specialized medical equipment for patients who did not qualify for the equipment and for patients who had died or were no longer using the equipment. Hill-Rom also was alleged to have submitted claims for medically unnecessary equipment.
Medtronic, Inc. agreed to pay $40 million to the United States based upon allegations about certain sales and marketing practices in the spinal business. Two qui tam suits alleged that the Medtronic Sofamor Danek division (MSD) paid kickbacks to doctors to induce them to use MSD’s spinal products. The government alleged that, between 1998 and 2003, Medtronic paid kickbacks in a number of forms, including sham consulting agreements, sham royalty agreements and lavish trips to desirable locations.
Renal Care Group, RCG Supply Company, and Fresenius Medical Holdings, Inc. were ordered to pay more than $19.4 million plus interest to resolve claims made in a qui tam complaint. The complaint alleged that following a merger, Renal Care Group and Fresenius created RCG Supply Company, a sham supply company, in order to fraudulently bill Medicare and Medicaid in violation of the False Claims Act.