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Home Care Co. Pays $21.5M to End FCA Suit

Medicare is a national social insurance program that provides health insurance to Americans who are aged 65 or older, younger people with disabilities, and people with end-stage renal disease and amyotrophic lateral sclerosis. As a social insurance program, it is largely funded by payroll taxes on employers and workers, and accounts for about 17% of the 2016 proposed Federal budget. The program contracts with regional insurance companies to process fee-for-service claims per year in order to provide health insurance options for eligible Medicare patients.

When Medicare pays health insurance providers to take their patients, the program may be taken advantage of if for example, the provider bills the government more than it would charge a non-Medicare patient. Moreover, although the individual patient is not the one who will cover the inflation, this practice takes away from the available funds for the entire group of patients, and essentially steals taxpayers' money. Thus, to crack down on such entities that commit such fraud against the government, the False Claims Act ("FCA") was enacted.

The Department of Justice ("DOJ") brought a suit against MD2U Holding Co. ("MD2U," or the "Company") and various subsidiaries, such as Home Care Co., for violating the FCA by frequently and consistently using billing codes that were reserved for the highest level of treatment when delivering low-level primary care services in residential settings. For example, although visits would only last less than 10 minutes, the Company coded these visits as complex services that would typically require a 60-minute visit. The DOJ also found that the Company copied old records in order to streamline its practice of documenting services it never performed and overbilled Medicare by embellishing the homebound status of patients.

After the DOJ's investigation on July 7, 2016, MD2U accepted responsibility for submitting false claims to the government from 2007 to 2014 (though claiming it was unintentional), and agreed to pay $21.5 million back to the government.

The legal team at SFMS has significant experience litigating FCA matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS is an active member of Integrated Advisory Group (, which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at


Overley, Jeff. "Home Care Co. Inks $21.5M FCA Deal Over 'Extreme' Billing." Law360. Last modified July 7, 2016.

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