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Elder Care Chain to Pay $15M Settlement for False Medicare Fraud

PITTSBURGH – An elder care company has agreed to pay $15 million to settle claims that it filed false Medicare claims at nearly 30 of its facilities, including one in Wheeling.

In a settlement agreement with the U.S. Department of Justice that was reached Wednesday, Guardian Elder Care agreed to pay $15,466,278 within 20 days. The agreement includes $6,261,070 in restitution.

Guardian Elder Care was accused of pressuring its rehabilitation therapists to provide therapy services to meet financial targets and maximize revenue without regard to the clinical needs of patients, resulting in the submission of false claims.

From Jan. 1, 2011, to Dec. 31, 2017, the Pennsylvania-based company provided those “ultra high” group rates that were not medically necessary at 28 facilities in Pennsylvania, Ohio and West Virginia, including at Peterson Rehabilitation Hospital & Geriatric Center in Wheeling.

“Billing federal health care programs for medically unnecessary rehabilitation services not only depletes these programs’ funds but also exploits our most vulnerable citizens,” said U.S. Attorney Scott Brady in Pittsburgh “Our office will continue to aggressively pursue providers who take advantage of our seniors by putting financial gain ahead of patient care.”

During the investigation, the company voluntarily disclosed that it had employed two people who were excluded from federal health care programs, but were receiving payments for services provided during their term of exclusion.

The company will also have to pay 5 percent interest on the settlement totaling approximately $2.8 million to be paid to Philippa Krauss and Julie White, the two company employees who alerted the government of the incidents. The company will also have to pay $535,000 in costs and attorney’s fees to Krauss and White.

“We thank Ms. Krauss and Ms. White for their role in bringing this alleged scheme to light,” U.S. Attorney William McSwain said. “We also commend Guardian Elder Care for telling us about its employment of the excluded providers. It is in their best interest for companies to make voluntary disclosures and emphasize compliance going forward, as my office will take this sort of cooperation into consideration when determining an appropriate resolution.”

There has been no determination of civil liability in the case, and the settled civil claims are only allegations, Brady noted.

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