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Press Release

United States Settles Claims for Improper Inpatient Rehabilitation Admissions for over $1.7 Million

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

LAFAYETTE, La. - United States Attorney Brandon B. Brown announced that Lafayette Physical Rehabilitation Hospital and its management company, Acadiana Management Group, LLC have agreed to pay $1.2 million, and Dr. Carolyn Smith agreed to pay $575,000 to resolve allegations that they violated the False Claims Act by submitting claims to Medicare for medically unnecessary inpatient rehabilitation services. 

“This settlement demonstrates our commitment to ensuring that those who participate in federal healthcare programs follow the rules,” said U.S. Attorney Brandon B. Brown.  “Billing for non-covered rehabilitation hospital stays results in a misuse of federal dollars.  The financial viability of our Medicare program must be protected for current and future generations.”

The United States alleged that from January 1, 2010 through December 31, 2016, Dr. Smith admitted certain patients to Lafayette Physical Rehabilitation Hospital for whom inpatient rehabilitation treatment was not medically reasonable or necessary.  Dr. Smith repeatedly admitted these patients, often by putting improper pressure on the patients, and falsely certified that the patients met the applicable criteria for inpatient admission.  However,  the patients did not satisfy the criteria and did not need impatient rehabilitation services. 

“The Department Health and Human Services, Office of Inspector General (HHS-OIG) will continue to aggressively investigate health care providers who submit Medicare claims for medically unnecessary services,” said HHS-OIG Special Agent in Charge Jason Meadows. “Inpatient rehabilitation services are expensive, and Medicare dollars should be reserved for patients who need those services - not hospitals and physicians seeking to make easy money through improper billing.”

This civil settlement includes the resolution of claims brought under the qui tam or whistle blower provisions of the False Claims Act.  Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.  The whistleblowers, Tamara Boyd and Nancy Morrill, former employees of LPRH, will receive over 20% of the settlement amount. 

The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Western District of Louisiana and HHS-OIG. Assistant U.S. Attorney Melissa Theriot and First Assistant U.S. Attorney Jerry Edwards handled the litigation, along with HHS-OIG Special Agent Rita Bergeron. Special Agent Bergeron and Assistant U.S. Attorney Karen King handled the investigation.

The claims resolved by the settlement are allegations only, and there has been no determination of liability. 

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Updated April 24, 2023

Health Care Fraud