Tuesday, May 31, 2011

United States Awarded $ 82 Million in a Medicare Fraud Against Renal Care Group & Fresenius Medical Care


Source- http://www.justice.gov/usao/moe/press_releases/archived_press_releases/2011_press_releases/may/renal_care_group.html

St. Louis, MO: The United States Attorney’s Office announced that a federal judge has entered a judgment of $82,642,592 in favor of the United States in a "whisteblower" lawsuit originally filed in the federal district court in St. Louis in 2005, and then transferred to the federal district court in Nashville, Tennessee. The lawsuit claimed that Renal Care Group, Renal Care Group Supply Company and Fresenius Medical Care Holdings, Inc. recklessly disregarded federal law when billing the Medicare program for home dialysis supplies and equipment during 1999-2005.

The Court's orders in this case discuss the concerns of multiple Renal Care Group employees who complained about the operation and Medicare billing activity of the Renal Care Group Supply Company, including one regional manager who wrote, "I do not wish to go to jail," and felt the company "was not in the best interests of patients" after receiving a corporate directive about converting patients into the Renal Care Group Supply Company. The Court further noted that Renal Care Group failed to heed the advice of the company's lawyers when operating the supply company and also discussed an internal audit of the supply company that found that one hundred percent of the company's files were missing information that Medicare required for billing.

Renal Care Group ("RCG") was a publicly traded for-profit corporation and dialysis provider until it merged with dialysis industry competitor Fresenius Medical Care ("FMC"). RCG had its principal place of business in Nashville, Tennessee, and had locations throughout Missouri, including multiple facilities around the St. Louis metropolitan area. RCG Supply Company ("RCGSC") was a Tennessee corporation that was owned and operated by RCG. In August 2009, a District Court Judge in St. Louis transferred the case to the Middle District of Tennessee for trial, finding that a trial in Nashville, Tennessee, would be more convenient for many witnesses. FMC now owns and operates RCG's dialysis facilities after the merger with RCG. RCG and FMC provided renal dialysis and related services to patients with End-Stage Renal Disease (“ESRD”). ESRD is a life threatening condition in which a patient's kidneys are unable to remove toxins from the blood, thus necessitating some form of dialysis treatment. This condition is often suffered by patients who have experienced chronic kidney disease over a period of time. The Government's Medicare program generally provides coverage for ESRD patients.

The Government's complaint alleged that between January 1999 and December 2005, RCGSC submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment. All of these claims, as well as related claims for support services rendered by RCG dialysis clinics were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients. Under federal law, the Medicare program pays companies that provide dialysis supplies to ESRD patients only if the companies that provide the supplies are truly independent from dialysis facilities and the ESRD patient chooses to receive supplies from the independent supply company. Defendants set up a sham billing company, RCGSC, that was not independent from RCG. Further, RCG interfered with ESRD patients' choice of supply options, requiring patients to "move" to RCGSC. Even after RCG employees raised concerns and industry competitors closed their supply companies, RCG kept RCGSC open because of the illicit revenue it created.

This is the second Medicare fraud case focused on the dialysis industry brought by the United States Attorney’s Office for the Eastern District of Missouri. In December 2005, Gambro Healthcare, a leading owner and operator of renal dialysis clinics in the United States, paid the United States $310.5 million to resolve civil liabilities stemming from alleged kickbacks paid to physicians, false statements made to procure payment for unnecessary tests and services, and payments made to Gambro Supply, a sham durable medical equipment company.


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