Nashville-Based James W. Carell, CareAll, Inc., and Related Entities Agree to Pay U.S. $9.375 Million to Resolve False Caims Act Lawsuit
James W. Carell, CareAll Management, LLC and related entities have agreed to pay $9.375 million to the federal government to resolve the lawsuit that the United States filed in 2009 alleging that they violated the False Claims Act, announced Stuart Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice and Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee.
The lawsuit also alleged that CareAll (formerly known as Diversified Health Management, Inc.) and related entities, including, CareAll, Inc., the James W. Carell Family Trust, VIP Home Nursing and Rehabilitation Services, LLC, Professional Home Health Care, LLC, University Home Health, LLC and Elizabeth Vining (as representative of the Estate of Robert Vining) caused Medicare to pay out money through mistake of fact, and were unjustly enriched by falsely concealing the home health agencies’ relationship with their management company. VIP, Professional and University now operate under the name CareAll.
James W. Carell and the related CareAll entities named above also agreed to be bound by the terms of a Corporate Integrity Agreement with the Department of Health andHuman Services-Office of Inspector General (HHS-OIG).
CareAll and its related entities are one of the largest home health providers in Tennessee. This settlement resolves the United States’ lawsuit alleging that the CareAll entities fraudulently submitted eight cost reports for fiscal years 1999, 2000, and 2001 to support their Medicare billings. The United States alleged that these reports were false because they knowingly hid the relationship between the management company and the home health agencies.
According to the complaint the United States filed in this case, the cost reports should have disclosed that the management company was related to the home health agencies, which would have lowered the Medicare reimbursement for the management company’s services. During the relevant years, the United States alleged that James W. Carell owned the management company, and his friend Robert Vining, an attorney who lived in Missouri, served as the nominee or “sham” owner of the home health agencies.
The United States further alleged in Court filings that the management company exerted significant control over the home health agencies in a myriad of ways, including James. W. Carell’s key role in facilitating Robert Vining’s purchase of the home health agencies; loans worth millions of dollars from companies owned by James W. Carell to the home health agencies; cash transfers for millions of dollars from the management company to the home health agencies; the management company’s day to day control over the home health agencies’ operations; and Robert Vining’s role as a mere figurehead owner.
The United States also alleged in court filings that James W. Carell profited greatly from this sham owner relationship and that he monetarily rewarded Robert Vining for his participation in this scheme.
“The false reporting scheme alleged in this case robbed the Medicare Trust Fund of millions of taxpayer dollars,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “Settlements like this one make sure that our federal health care dollars are spent appropriately – on maintaining critical health care programs.”
“This settlement is yet another example of this office’s commitment to enforcing the False Claims Act in health care cases and protecting the taxpayer’s interests,” said U.S. Attorney Jerry Martin. “The U.S. Attorney’s Office will continue to return money to the federal treasury by aggressively pursuing cases where, based on false reporting and concealment, health care companies are unjustly enriched.”
“This settlement represents a significant victory in our fight against fraud in the Medicare system,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The OIG is committed to protecting the integrity of federal health care programs by aggressively pursuing entities that increase their revenue through deceitful schemes and trickery.”
The investigation of this case was conducted by HHS-OIG. The government was represented by Asst. U.S. Attorney Ellen Bowden McIntyre of the Middle District of Tennessee and Trial Attorneys and Susan Lynch and Michael McMahon of the Civil Division - U.S. Department of Justice.