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Press Release

Iowa Home Care Company to Pay $5.63 Million to Settle False Claims Act Allegations

For Immediate Release
Office of Public Affairs

ResCare Iowa Inc. has agreed to pay $5.63 million to the United States and the state of Iowa to resolve allegations that it violated the False Claims Act by submitting false home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today.  ResCare Iowa – a subsidiary of Louisville, Kentucky, based ResCare Inc. – provides home healthcare services to patients in the state of Iowa.

“Home health agencies that bill Medicare and Medicaid must follow the rules,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “This settlement demonstrates the Department’s commitment to safeguarding taxpayer dollars and ensuring that they are used to provide medically necessary services to federal health care beneficiaries.”

The rules of both Medicare and the state of Iowa’s Medicaid program require an independent physician to certify that home healthcare services are medically necessary and to order the specific type and amount of healthcare services to be provided by the home health agency.  Additionally, since 2011, Medicare and Iowa Medicaid rules require these independent physicians to perform an in-person “face-to-face” assessment of each patient before the home health agency can bill the government for any home healthcare services.  The settlement resolves allegations that between 2009 and 2014, ResCare Iowa billed the government for services provided to Medicare and Medicaid patients in Iowa without documenting compliance with these requirements. 

“We commenced this investigation due to concerns that this provider was not complying with the rules and was not submitting accurate claims for payment,” said U.S. Attorney Kevin W. Techau of the Northern District of Iowa.  “When the government pays for home-based medical services, we are dedicated to ensuring the money is well spent and medically deserving patients receive the care to which they are entitled.”

“Home health care providers that receive Medicare and Medicaid funds must abide by rules designed to ensure taxpayer funds are spent properly and that patients receive the appropriate care,” said Special Agent in Charge Gerald T. Roy of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “We will continue to hold health care providers accountable for submitting improper claims.”

Medicaid is jointly funded by the states and the federal government.  The state of Iowa, which paid part of the Medicaid funds at issue, will receive $2.32 million of the settlement amount. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.6 billion through False Claims Act cases, with more than $15.1 billion of that amount recovered in cases involving fraud against federal health care programs.

This settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Northern District of Iowa, HHS-OIG and the Iowa Attorney General’s Office.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

Updated May 1, 2017

False Claims Act
Health Care Fraud
Press Release Number: 15-161