The former chief executive officer of HealthEssentials Solutions Inc. will be paying $1 million to resolve claims that he knowingly caused the company to submit false claims to Medicare between 1994 and 2004. The company’s chief financial officer has agreed to pay $20,000 to resolve similar allegations he faced.
“In recent years, the government has been increasing its efforts to hold companies and individuals accountable for filing false claims for payment,” commented Christopher Paulos, an attorney with the Levin, Papantonio law firm who practices in the areas of qui tam or whistleblower and False Claims Act litigation.
HealthEssentials provided primary care services to nursing facility, assisted living, and other patients until they filed for bankruptcy in 2005. The CEO, president and board chairman, Michael R. Barr, has agreed to pay $1 million for his involvement. Norman J. Pfaadt, the CFO, will pay $20,000.
Pfaadt and Barr were alleged to have inflated their company’s services or charged for services that were not considered medically necessary. Their activities included pressuring employees of the company to inappropriately inflate their billings despite having advised by their attorneys not to do so, according to the DOJ.
“Charging patients and their insurers unreasonable prices or for unnecessary procedures is irresponsible and puts an unjustified burden on taxpayers,” Mr. Paulos added. “Fortunately when the insurer is a government entity, like Medicare, the False Claims Act provides means for holding those entities behind the false claims responsible.”
Beyond this, the government alleged that Barr encouraged his employees to disregard the needs of patients and perform assessments that were unnecessary, for the sole purpose of increasing their revenue. Barr will be excluded from participating in federally funded health care programs for a three-year period.
This lawsuit was filed by former HealthEssential employees Michael and Leigh RoBards. The whistleblowers came forward and filed a lawsuit under the qui tam or whistleblower provisions of the False Claims Act. Under the False Claims Act, an individual who has knowledge of an entity filing claims for false payment can file suit on behalf of the government and share in the recovery. For their efforts, Mr. and Mrs. Robards will receive $153,000.