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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Tennessee

FOR IMMEDIATE RELEASE
Friday, February 2, 2018

Memphis Operator, LLC d/b/a Spring Gate Rehabilitation and Healthcare Center will pay $500,000 to the United States and the State of Tennessee for services rendered to residents of Spring Gate that were materially substandard and worthless

 

Memphis, TN – Memphis Operator, LLC d/b/a Spring Gate Rehabilitation and Healthcare Center will pay $500,000 to the United States and the State of Tennessee to resolve allegations of false claims to Medicare and Tenncare for services rendered to residents of Spring Gate that were materially substandard, worthless and were provided in violation of certain essential requirements that the United States expects skilled nursing facilities to meet.

The Complaint alleged that from 2012 to 2015, Spring Gate provided substandard and worthless nursing home services to residents. Under federal and state law, Medicare and Tenncare will not pay for services deemed to be so deficient that they are essentially worthless.

The allegations resolved in this settlement were first raised in a lawsuit filed against Spring Gate under the qui tam provisions of the False Claims Act, which permits parties to sue on behalf of the government for the submission of false claims and share in the recovery. The False Claims Act, 31 U.S.C. §§ 3729-3733, provides the United States with a cause of action against any person or entity that knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.

The case was captioned United States of America and the State of Tennessee ex rel. Chris Godwin v. Memphis Operator, LLC (d/b/a Spring Gate Rehabilitation and Healthcare Center). Vericare Management, Inc. and PharMerica Corporation, No. 2:15-cv-2090 (W.D.Tenn.). During the investigation of this matter, Spring Gate cooperated with the United States and the State of Tennessee in bringing this matter to a resolution.

"Residents of nursing homes are some of our most vulnerable citizens. When nursing homes break the law by defrauding the government for substandard or worthless services we will use our resources to combat this fraud and hold them accountable," said D. Michael Dunavant, United States Attorney for the Western District of Tennessee.

"Protecting the health and safety of Medicare patients is one of our primary concerns," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "Nursing facilities that fail to meet minimum quality standards can expect to pay a heavy price for neglecting their residents."

In addition to the $500,000 settlement, Spring Gate entered into a Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General intended to deter future wrongful conduct.

This investigation was conducted by the United States Department of Health and Human Services Office of the Inspector General, the Tennessee Bureau of Investigation and the Tennessee State Attorney General’s Office.

Assistant United States Attorneys Stuart J. Canale and Matt Waldrop and Steve Jobe, Senior Counsel for the Tennessee Attorney General prosecuted this case on the government’s behalf.

Updated February 2, 2018