Mississippi Skilled Nursing Facility, Related Companies, and Executives Agree to Pay $1.25 Million to Settle False Claims Act Allegations of Grossly Substandard Care to Facility Residents
WASHINGTON – The Department of Justice announced today that Hyperion Foundation, a Georgia not-for-profit entity (Hyperion), Julie Mittleider, a resident of Georgia and Hyperion’s former President, AltaCare Corporation, a Georgia corporation engaged in nursing home management (AltaCare), Douglas Mittleider, AltaCare’s Chief Executive Officer, and related companies, Long Term Care Services Inc. and Sentry Healthcare Acquirors Inc., have agreed to pay the United States a total of $1.25 million to resolve allegations of false claims to Medicare and the Mississippi Medicaid program for providing grossly substandard care to residents at the Oxford Health and Rehabilitation nursing home in Lumberton, Mississippi, from late 2005 through mid-2012, when it was operated by AltaCare, under a contract with Hyperion.
“Residents of nursing homes are some of our most vulnerable citizens,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “Nursing home operators who bill Medicare and Medicaid for providing their residents with grossly deficient services will be held accountable.”
The government alleged that from October 2005 to May 2012, Hyperion made claims to Medicare and Medicaid for providing effectively worthless services to residents at the Lumberton, Mississippi facility, while the facility was managed by AltaCare. For example, the United States alleged that Hyperion failed to meet the nutritional needs of residents, failed to administer medications to residents as prescribed by their physicians, overmedicated residents, hired insufficient staff to care for them, and diverted Medicare and Medicaid funds to other entities affiliated with Douglas or Julie Mittleider, leaving the facility unable to pay for its basic operations, including food, heat, air conditioning, pest control, and cleaning. These failures, the United States alleged, caused the facility’s residents to suffer pressure ulcers, falls, dehydration, and malnutrition, among other physical, mental and emotional harms. As a result, Hyperion allegedly submitted false claims for grossly substandard care, and Douglas Mittleider, AltaCare and certain related companies allegedly caused such false claims.
“When operators of nursing homes harm our most vulnerable citizens and break the law by defrauding our government for grossly substandard or worthless services, we will bring to bear all the resources of the Federal Government in order to rectify these terrible actions,” said D. Michael Hurst, Jr., U.S. Attorney for the Southern District of Mississippi. “I commend our attorneys and investigators for resolving this travesty with one of the largest healthcare fraud settlements involving a single nursing home. We will continue the Department of Justice’s long-standing commitment to protecting the elderly.”
“It’s troubling when a nursing home company and its executives accept Medicare and Medicaid money to care for vulnerable nursing home residents and provide grossly deficient care, as alleged in this case,” said Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue to hold nursing homes accountable to ensure residents receive quality healthcare and are provided safe living conditions.”
The settlement resolves allegations filed in a lawsuit by Academy Health Center Inc., the owner and landlord of the Lumberton, Mississippi skilled nursing facility. The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and share in any recovery. The False Claims Act authorizes the United States to intervene and take over primary responsibility for the action, as it did in this case. The amount to be recovered by the private whistleblower has not been determined.
The case is captioned United States ex rel. Academy Health Center, Inc. v. Hyperion Foundation, Inc., et al., 3:10-cv-552-CWR-LRA (S.D. Miss.). It was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of Mississippi, and HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.
The government’s complaint in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).