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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

FOR IMMEDIATE RELEASE
Tuesday, June 29, 2021

California’s Second-Largest Skilled Nursing Facility Operator Pays $450,000 to Resolve False Claims Act Allegations

SACRAMENTO, Calif. — Skilled nursing facility operator Plum Healthcare Group LLC and its entity Azalea Holdings LLC, dba McKinley Park Care Center have agreed to pay more than $451,439 to resolve allegations that they violated the False Claims Act, Acting U.S. Attorney Phillip A. Talbert announced today.

Specifically, Plum Healthcare Group agreed to resolve allegations that an employee at its McKinley Park Care Center knowingly created billing records for services that were not actually provided. According to the settlement agreement, Plum Healthcare Group then used these false records to bill Medicare, leading it to obtain Medicare reimbursements that were higher than warranted. The government also alleges that the management of Plum Healthcare Group learned of the extent of these false billings to Medicare, did not conduct an adequate investigation into this conduct, and then failed to submit a refund to Medicare for the full amount management knew had been overbilled or otherwise disclose its false billings to the government.

“Medicare participants who fail to voluntarily disclose fraud risk significant consequences,” said Acting U.S. Attorney Talbert. “As this settlement makes clear, knowingly retaining Medicare funds obtained by fraud is itself a violation of the law, and this office is committed to pursuing enforcement actions to remedy this conduct.”

“It’s unacceptable to stick taxpayers with a bill for health care services that were never provided and for health care executives to look the other way when these false claims were submitted to Medicare,” said Special Agent in Charge Steven J. Ryan of the U.S. Health and Human Services, Office of the Inspector General. “Working closely with our law enforcement partners, we will continue to protect the integrity of Federal health care programs and investigate false billing allegations.”

“The FBI is committed to working with our partners to identify and investigate fraud, especially when it defrauds taxpayer-funded programs,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “This settlement serves as a warning to Medicare participants to carefully audit and investigate records and billing to ensure their business operations are not in violation of federal law.”

The settlement with Plum Healthcare Group resolves allegations originally brought in a lawsuit filed by a former employee under the whistleblower provisions of the False Claims Act. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The whistleblower will receive over $90,000 as her share of the recovery from Plum Healthcare Group. The whistleblower’s claims for retaliation and attorneys’ fees are not resolved by this settlement.

This case was the result of an investigation by the HHS Office of the Inspector General, the Federal Bureau of Investigation, along with the U.S. Attorney’s Office for the Eastern District of California. Assistant U.S. Attorney Steven Tennyson handled the matter for the United States. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Topic(s): 
False Claims Act
Updated June 29, 2021