Department of Justice Seal Department of Justice
TUESDAY, JULY 17, 2007
(202) 514-2007
TDD (202) 514-1888

U.S. Joins Suit Against Renal Care Group Alleging False Billings to Medicare for Home Care Renal Dialysis

WASHINGTON – The United States has intervened in a whistleblower suit accusing Renal Care Group Inc. (RCG) and Renal Care Group Supply Company (RCGSC) of fraudulently billing Medicare, the Justice Department announced today. The suit alleges that RCG and RCGSC fraudulently billed for supplies and equipment provided to End Stage Renal Disease (ESRD) patients who received dialysis treatments at home. Both companies are owned by Fresenius Medical Care Holdings Inc. which was also named in the lawsuit.

The government’s complaint alleges that between January 1999 and December 2005, RCGSC submitted claims to Medicare 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 are alleged to be false because the defendants were prohibited from billing, 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. According to the complaint, the companies set up a sham supply company, RCGSC, that was not independent from RCG, and that did little more than submit bills to Medicare. It’s further alleged that 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.

“By intervening in this case, the government is once again demonstrating its continued commitment to stamping out fraudulent practices that threaten the integrity of the Medicare Trust Fund,” said Assistant Attorney General Peter D. Keisler of the Justice Department’s Civil Division.

The suit was filed in U.S. District Court in St. Louis, Mo., by two former RCG employees, Julie Williams and Dr. John Martinez. Ms. Williams was employed by RCG as a regional administrator and Dr. Martinez served as a medical director for RCG dialysis clinics in East Texas.

Under the qui tam provisions of the False Claims Act, a private party, known as a whistleblower or relator, can file an action on behalf of the United States and receive a portion of the recovery. Under the False Claims Act, the United States may recover three times the amount of its losses plus civil penalties.

The investigation of the allegations in the qui tam complaint was conducted by the U.S. Attorney’s Office in St. Louis, the Department’s Civil Division, the Federal Bureau of Investigation, and the Office of Inspector General of the Department of Health and Human Services.