Skip to main content
Press Release

Specialty Hospitals Of America To Pay United States

For Immediate Release
U.S. Attorney's Office, District of Columbia

$4.2 Million to Resolve False Claims Allegations

     WASHINGTON – Specialty Hospitals of America, LLC has agreed to pay the United States $4.2 million to resolve allegations that it knowingly received reimbursement for inflated Medicare claims.

     The settlement was announced today by U.S. Attorney Ronald C. Machen Jr. and Nick DiGiulio, Special Agent in Charge for the Inspector General’s Office of the U.S. Department of Health and Human Services in the region including Washington, D.C.

     Specialty Hospitals of America, LLC, based in Portsmouth, N.H., operates two long-term care facilities in Washington, DC. The United States alleged that the company filed a cost report with its Medicare contractor in late May of 2008 that knowingly contained inaccurate revenue and expense data for the fiscal 2007 operations of Specialty Hospital of Washington-Hadley. These inaccuracies caused the cost-to-charge ratio to be inflated, which, in turn led to overpayments on certain claims submitted between Jan. 1, 2007 and July 14, 2009.

     The settlement resolves a lawsuit filed in the U.S. District Court for the District of Columbia by a former company employee, James A. Roark, Sr., under the qui tam, or whistleblower provisions, of the False Claims Act.  Under the Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government.  Mr. Roark will receive $798,000 as his share of the government’s recovery.             

     “This settlement holds the contractor accountable for overbilling the government by $4.2 million and returns that money to the federal treasury,” said U.S. Attorney Machen. “We commend the whistleblower for coming forward and bringing these billing practices to light.”

     “When hospitals submit excessive costs for reimbursement, taxpayers pay more than they should for needed care,” said Special Agent in Charge DiGiulio. “We cannot tolerate any form of waste, fraud or abuse of our health benefits and we commend citizens who report suspected violations to the Office of Inspector General.

     Special Agent in Charge DiGiulio urged people who suspect Medicare or Medicaid fraud to call the Office of Inspector General Hotline at 1-800-HHS-TIPS (1-800-447-8477).

     This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the District of Columbia; the Department of Justice, Civil Division, and the HHS Office of Inspector General in investigating the allegations in this case.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

     The case is captioned United States ex rel. Roark v. Specialty Hospitals of America, LLC, Case No. 1:10-cv-0719 (D.D.C.).

Updated February 19, 2015