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Healthcare Rehabilitation Provider Pays $4 Million to Settle False Claims Act Allegations

Date Published
Apr 20, 2020

Encore Rehabilitation Services LLC, a contract therapy company based in Farmington Hills, Michigan, agreed to pay $4.03 million to settle False Claims Act allegations that the company knowingly provided unnecessary Medicare services to patients in three Michigan facilities. The settlement resolves allegations that Encore provided unreasonable, unnecessary, or unskilled rehabilitation therapy and recorded individual therapy when providing lower-cost group therapy at three different nursing facilities between 2012 and 2018.

Under the False Claims Act, whistleblowers can be rewarded for confidentially reporting fraud that results in a financial loss to the federal government. This settlement resolves previous allegations in three separate lawsuits filed under the qui tam provisions of the False Claims Act by whistleblowers Linda Anderson, Reza Saffarian and Audrey Theile, and Adam LaFerriere who had all worked at Encore.

“The resolution announced today demonstrates my office’s commitment to aggressively pursuing providers who utilize fraudulent practices to put their financial self-interest over a duty to patients knowingly,” said U.S. Attorney Andrew Byerly Birge for the Western District of Michigan.  “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profits.”

Simultaneously, Encore entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health & Human Services, including the implementation of a risk assessment and internal review process designed to identify and address the evolving compliance risks. This five-year agreement requires training, auditing, and monitoring to discuss the company’s issue in conduct related to the case.

“The submission of claims for unreasonable, unnecessary, or unskilled rehabilitative services is improper and unacceptable,” said Special Agent in Charge Lamont Pugh III, HHS-OIG – Chicago Region.  “The public expects that proper services will be provided and those taxpayer dollars will not be wasted.  OIG Corporate Integrity Agreements help to ensure that contracted providers, who have caused improper billing practices change their behavior.”

If you believe that you may have information about a company committing fraud against the government, the Qui Tam Attorneys at Tycko & Zavareei are readily available to assist in bringing forward a case. We have years of experience litigating under the False Claims Act by holding individuals and corporations accountable for fraud against the government. We have the resources to provide you with guidance on whistleblowing cases relating to fraud within government programs, securities and commodities, tax payments, the banking industry, and more. We have won our clients millions of dollars in compensation by working with our lawyers and the government. If you would like to consult with one of our False Claims Act attorneys, please fill out our Confidential Case Evaluation Form or call (202) 973-0900 to speak with a lawyer.

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