Florida health care firm agrees to $7M settlement over Medicare claims

A 91-year-old Florida man with a shoulder injury and dementia wasn’t benefiting from repeated physical therapy sessions, the man’s therapist told his boss.

But Carter Healthcare continued sending a therapist to the man’s home and billing a federal government benefits program even though the man’s wife refused the treatment, according to a complaint filed in federal court.

In another case, Carter Healthcare fired occupational therapist Sharon Mahaffey after she refused to recommend more treatment for a patient whom she considered healed, the complaint states.

Earlier this month, the U.S. Department of Justice announced that Carter Healthcare will pay $7.1 million to resolve allegations that it overbilled for home care therapy paid by Medicare and gave unneeded medical treatment to patients across Florida.

The complaint filed in the U.S. District Court South District of Florida on behalf of Mahaffey and another whistleblower revealed that Carter Healthcare expected employees to ensure patients received a minimum of 18 home physical or occupational therapy sessions — no matter their condition. It then billed Medicare, the federal health insurance program for people 65 and older, for payment.

The treatment quota was standard across the company, the complaint states. The number was determined to be below the level that would trigger additional scrutiny from the federal government.

Carter Healthcare also instructed nurses to falsify initial assessment reports to exaggerate the need for treatment, the complaint states. Therapists were instructed to ignore patient wishes and the objections of family members and to continue providing therapy.

“Health care should be individualized,” said Janel Quinn, principal attorney at The Employment Law Group law firm, which is representing the two whistleblower employees, who were fired by Carter Healthcare. “This one-size-fits-all health care model is always kind of a red flag.”

In a separate investigation, the Department of Justice also announced Carter Healthcare is refunding $22.9 million to the federal government to settle allegations that it gave physicians kickbacks for referrals of home health patients in Oklahoma and Texas.

Under the agreement, some of the restitution will be paid out of pocket by former company president Stanley Carter, who has since stepped down, and chief operating officer Brad Carter. Both were also barred from dealing with federal health care programs for five years. The group’s Florida operation and its Oklahoma parent company agreed to enter a monitoring program run by the U.S. Department of Health and Human Services.

Carter Healthcare, which is based in Oklahoma City, operates in seven states and has 13 locations in Florida, including Tampa, Largo and New Port Richey. Under the settlement, there is no finding that it violated any laws, the company said in a statement.

“While Carter Healthcare does not believe it did anything wrong and continues to deny all of the government’s allegations, the company entered into this settlement with the federal government to avoid the significant expense of protracted litigation,” Justin Carter, the company’s new president, said in the statement.

The False Claims Act allows whistleblowers to get a share of any money recovered. Mahaffey and physical therapist Mark Brimer will share $1.3 million, according to the Department of Justice.

Both therapists have more than 30 years of experience in their fields. They raised concerns to their supervisors and management before contacting investigators, said Quinn, who is representing the pair in a wrongful-dismissal case. Under the settlement agreement, Carter Healthcare is also paying the pair’s legal fees.

“Sharon and Mark spoke out loudly against Carter’s insistence on medically unnecessary treatments, including the pointless therapies they were ordered to provide on the U.S. taxpayer’s dime,” said Quinn. “Until today, the only reward they’ve gotten for their integrity was a pair of pink slips.

“This settlement offers them some real vindication — and soon they’ll bring Carter Healthcare before a jury to correct their wrongful dismissals, too.”

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