NASHVILLE, Tenn.—A federal judge ordered Renal Care Group, Renal Care Group Supply Company, and Fresenius Medical Care Holdings to pay $19.4 million because the group “recklessly disregarded federal law when billing the Medicare program for home dialysis supplies and equipment,” according to a March 23 news release from the U.S. Attorney’s Office.
Under federal law, the Medicare program pays companies that provide dialysis supplies to end-stage renal disease patients only if the companies that provide the supplies are truly independent from dialysis facilities and the ESRD patient chooses to receive supplies from the independent supply company.
The U.S. complaint alleged that defendants set up a sham billing company called Renal Care Group Supply Company that was not independent from the dialysis provider Renal Care Group, which was acquired by Fresenius in 2006.
In addition, the prosecutors alleged that Renal Care Group interfered with ESRD patients' choice of supply options, requiring patients to "move" to Renal Care Group Supply Company.
The complaint alleged that between January 1999 and December 2005, Renal Care Group Supply Company submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment.
The government also alleged that all of these claims, as well as the related claims for support services rendered by Renal Care Group dialysis clinics, were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients.
U.S. District Judge William J. Haynes, Jr., held that the defendants exhibited reckless disregard of the legal mandates of the applicable Medicare statutes and regulations.
As a result, Renal Care Group, Renal Care Group Supply Company, and Fresenius Medical Care Holdings, Inc. were ordered to pay the United States $19,366,705, plus interest.
Haynes further noted that complaints and concerns were raised by Renal Care Group employees about the operation and Medicare billing activity of the Renal Care Group Supply Company.
The court's opinion cites one employee who wrote "I do not wish to go to jail" and felt the company's plan "was not in the best interests of patients" after receiving a corporate directive about converting patients into the Renal Care Group Supply Company.
The court's order further notes that Renal Care Group failed to heed the advice of the company's lawyers when operating the supply company, and discussed an internal audit of the supply company that found that 100 percent of the company's files were missing information that Medicare required for billing the government program. The court held that reckless disregard is sufficient for liability under the federal False Claims Act, and that specific intent to defraud is not required.
The court also found that defendants were unjustly enriched by their retention of the Medicare payments, and to allow RCG to retain the Medicare payments would undermine clear congressional mandate and would be inequitable.
"The U.S. Attorney's office is committed to vigorously pursuing Medicare providers who fraudulently seek and retain payment from the Medicare program," said U.S. Attorney Edward M. Yarbrough. "There will be no tolerance for those who voluntarily seek to provide services to Medicare beneficiaries but then take taxpayer money from the Medicare program to which they are not entitled. Those who do will be discovered, and the United States will seek treble damages, interest on the amount owed, and the medical providers may be subject to exclusion from the Medicare program."
