Ohio Companies Pay $19.5M to Resolve Skilled Nursing Fraud Claims

Ohio-based Foundations Health Solutions Inc. (FHS), Olympia Therapy Inc., Tridia Hospice Care Inc. and executives of all three companies will pay a combined $19.5 million to resolve allegations pertaining to the submission of false claims for medically unnecessary rehabilitation therapy and hospice services.

FHS is the corporate successor to Provider Services Inc. (PSI), which provided management services to skilled nursing facilities. In 2010, PSI merged with BCFL Holdings Inc.Three years later, the company was renamed Foundation Health Solutions.

Olympia provided rehabilitation therapy services at skilled nursing facilities that were managed by PSI and BCFL. Tridia provided hospice care services.

Brian Colleran and Daniel Parker are the executives who partially controlled or owned PSI, BCFL, FHS, Olympia, and Tridia at various times between 2008 and 2013.

According to the Justice Department, between 2008 and 2012, Olympia and PSI/BCFL allegedly submitted false claims to Medicare for medically unnecessary rehabilitation therapy services at 18 skilled nursing facilities. A government investigation showed that the rehab was allegedly provided at medically unnecessary levels in order to fraudulently maximize Medicare reimbursement for the services.

During the same time period, Colleran and Parker allegedly solicited and received kickbacks in return for referring patients from skilled nursing facilities managed by PSI or BCFL to Amber Home Care, a Columbus, Ohio home health care services provider.

Between 2011 and 2013, Tridia allegedly submitted false claims to Medicare for hospice services provided to patients considered ineligible to receive hospice benefits from Medicare. During this time, Tridia allegedly failed to conduct proper certifications or medical examinations for certain patients, which made them ineligible to receive Medicare hospice benefits.

As part of the settlement, FHS and Colleran will enter into a five-year corporate integrity agreement with the HHS Office of Inspector General (HHS-OIG). The corporate integrity agreement is designed to increase FHS and Colleran’s accountability and transparency so that they will detect and avoid any fraud and abuse in the future.

Today’s settlement agreement resolves allegations initially brought by whistleblowers in two separate qui tam lawsuits. Whistleblower Vladimir Trakhter, a former Olympia employee, and Paula Bourne and La’Tasha Goodwin, both former employees at Tridia, filed lawsuits against the defendants in this case.

Under qui tam provisions of the False Claims Act, individuals are permitted to sue on the government’s behalf for any false claims. If the case leads to a successful enforcement action, the whistleblower shares in the recovery.

As a reward for bringing allegations to the government’s attention, Mr. Trahkter will receive approximately a reward of $2.9 million. Ms. Bourne and Ms. Goodwin collectively will share approximately $740,000.

The cases are captioned United States ex rel. Trakhter v. Provider Services, Inc., n/k/a BCFL Holdings, Inc., et. al., Case No. 1:11-CV-217, and United States ex rel. Bourne and Goodwin v. Brian Colleran, et. al., Case No. 1:12-CV-935.

The claims resolved by today’s settlement are allegations only, as there has been no determination of liability.

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