Skip to main content
Press Release

Behavioral Health Services Provider Agrees To Pay $1 Million For Allegedly Submitting False Claims To Federal Health Care Programs

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

NEWARK, N.J. – Vericare Management Inc., a behavioral health services provider, agreed today to pay more than $1 million to resolve allegations that it violated the False Claims Act by falsely billing federal health care programs for services that were not medically necessary, U.S. Attorney Paul J. Fishman announced.

Vericare, which is headquartered in San Diego, California, provides psychiatric and psychological services focused on geriatric patients in long-term care and skilled nursing facilities in New Jersey, California, and Texas, among other states.

According to the contentions of the United States contained in the settlement agreement:

From Jan. 1, 2012, through Dec. 31, 2014, Vericare sought and obtained “standing orders” or other agreements with 128 facilities under which Vericare’s clinicians performed evaluations on all new admissions to the facility. These evaluations were conducted regardless of whether a physician provided a patient-specific order indicating that such an evaluation was medically necessary. Vericare improperly submitted claims to the United States pursuant to these standing orders or other agreements for diagnostic interviews, evaluations, and examinations.

These allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.

The settlement also resolves allegations that Vericare incorrectly submitted claims to Medicare for certain nursing facility evaluation and management services which were not supported by the patient’s medical record. This component of the settlement resulted from Vericare’s self-disclosure of this issue to the U.S. Attorney’s Office. As a result of Vericare’s decision to self-disclose this issue, the company was required to pay significantly less than the treble damages and penalties that the United States may seek under the False Claims Act.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s settlement.

The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.  

U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Bart Rossi v. Vericare, Civil Action No. 13-6884 (D.N.J.).

Defense counsel for Vericare:

Michael Kendall Esq., Boston, Massachusetts


Counsel for relator:

Lisa M. Fittipaldi Esq., Warren, New Jersey

Updated October 29, 2015

Press Release Number: 15-392