HomeCare Concepts settles Medicare fraud lawsuit for $10M
HomeCare Concepts settles Medicare fraud lawsuit for $10M
By KAREN PIHL-CAREY
HHBR Staff Writer
HomeCare Concepts of America (HCCA; Dallas), one of the largest home health companies in Texas, has settled a Medicare fraud lawsuit for $10 million, payable to the federal government and a whistle-blower.
In turn, HomeCare has filed lawsuits against the former owners of the subsidiary home health company where the alleged fraud took place. HomeCare bought Infusion Management Systems (IMS; Dallas) in June 1996, without knowing about a federal investigation that culminated with last week’s settlement.
"We are the new owners of the company. All of the alleged activities occurred prior to our ownership of it," HomeCare Vice President Rick Buck told HHBR.
The previous owners gave HCCA no indication of an investigation, which is why the company is suing the former owners of IMS. Defendants named in the suit are former owners Stephen Maberry, A.B. Jones Jr., and C. Louise Maberry and the company’s accountant, Harry Mishra of Mishra Health Consulting (Houston).
Buck said HCCA fully cooperated with the government. "We’ve been anxious to put this behind us and move the company forward," he said.
The whistle-blower suit was filed by Dallas resident Jennifer Thomas, a former IMS employee, who alleged that IMS officials fraudulently took more than $20 million from the government. Thomas had worked for IMS four years before being fired a month before HomeCare took over operations.
An investigation by the Health and Human Services’ Office of Inspector General found that the fraud occurred before the IMS sale in 1996. In the settlement, Thomas and her attorneys will receive more than $1 million. The rest will go to a Medicare trust.
In a suit filed in a Dallas federal court last week, HomeCare alleges that the IMS sellers misrepresented and inflated the purchase price. The suit complains that Mishra committed "accounting malpractice" in the preparation of financial statements. And it charges the former owners with engaging in "an effort to sell the companies to an unsuspecting and innocent buyer and to distance themselves from the companies before the fraud was discovered."
Said Buck: "We intend to pursue every legal option open to us to recover damages, hold those responsible who actually committed the alleged illegal activities, and clear the good name of our company."
The amount of which HCCA hopes to recover through a lawsuit against the former owners and accountant of IMS is yet to be determined. IMS employs more than 8,000 people and serves 8,500 patients each month.
Buck said the government investigation has not diminished the company’s clientele.
"The quality of care and our service to customers has not and has never been effected by this," he told HHBR. "That has not hurt the company at all."
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