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Press Release

Chicago Health Care Company and Its Former Owners To Pay Nearly $2 Million To Settle False Claims Act Lawsuit

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

A Chicago health care company and its former owners will pay nearly $2 million to the United States and the States of Illinois and Indiana to resolve a civil lawsuit arising from the submission of false claims to Medicare and Medicaid. 

The settlement resolves allegations that KAREFIRST MANAGEMENT, an independent nurse practitioner group, developed its own proprietary patient charting software and required its nurse practitioners to use it, despite knowing that it resulted in fraudulently upcoded claims being submitted to and paid by Medicare and Medicaid.  The suit alleged that KareFirst contracted out nurse practitioners to see patients at skilled nursing facilities across the Chicago area.  Those nurse practitioners charted all patient visits using the software developed by KareFirst.  The software then generated false, upcoded claims that KareFirst submitted to Medicare and Medicaid for payment. 

The settlement resolves a civil lawsuit filed in U.S. District Court in Chicago by a former employee of KareFirst under the qui tam, or whistleblower, provisions of the False Claims Act.  The False Claims Act permits private citizens to bring lawsuits on behalf of the U.S. for false claims, and to share in any recovery.  The U.S. intervened in the lawsuit prior to the settlement. 

As part of the settlement agreement and consent order entered Friday by U.S. District Chief Judge Rebecca R. Pallmeyer, KareFirst and its former owners agreed to pay $1.99 million to Medicare and Medicaid over the next three years.

The settlement and consent judgment were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Mario Pinto, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Health and Human Services, Office of Inspector General, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorney Sarah F. Terman.

The public is reminded that civil allegations are accusations only, and there was no determination of liability as part of the settlement and consent judgment.

Updated June 18, 2024

False Claims Act
Health Care Fraud