Vanguard Healthcare Settles Medicare, Medicaid Fraud Claims for $18 Million

A Tennessee-based skilled nursing provider this week agreed to pay the federal government $18 million in order to resolve claims of Medicare and Medicaid fraud.

Vanguard Healthcare, LLC of Brentwood, Tenn. — along with several of its affiliated firms — reached the deal with the Department of Justice, which accused the provider of providing “grossly substandard nursing home services” at five facilities in the Volunteer State.

“The substandard care that many of these facilities’ residents endured while the companies were raiding the public coffers is deplorable,” Don Cochran, U.S. Attorney for the Middle District of Tennessee, said in a statement announcing the agreement.

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In particular, the DOJ alleged that Vanguard violated the False Claims Act by billing Medicare and Medicaid for services while failing to meet a variety of care requirements — such as failing to provide medications, using unnecessary restraints, and not meeting residents’ nutritional and hygiene needs. The company, along with CEO William Orand and former director of operations Mark Miller, were additionally accused of allowing pre-admission forms with forged signatures to be submitted to the state’s Medicaid program for reimbursement.

Despite the stated $18 million price tag, the federal government only expects to collect around $6 million due to ongoing bankruptcy proceedings at Vanguard and its affiliates; the company filed for Chapter 11 protection back in 2016, with some related companies reorganizing and others slated for liquidation, according to the Department of Justice.

As is typical in False Claims Acts settlements, the deal does not represent a finding of wrongdoing or an admission of liability; the government’s claims against Vanguard remain allegations, and the company strongly refuted the DOJ’s version of events in a statement provided to SNN.

“As in many civil cases, the cost of litigating this matter exceeded the cost of settlement,” a spokesperson for Vanguard said in the statement. “As a result, while Vanguard believed it would have been fully vindicated in court, it made the business decision to settle the matter.”

Vanguard also emphasized that $13.5 million of the settlement stemmed from claims at two entities that the company no longer owns, with that sum administered by a bankruptcy court.

Settlements are an exceedingly common way for providers to discharge Medicare and Medicaid fraud claims without a protracted legal fight. The government has collected around $59 billion since Congress approved the modernized version of the FCA back in 1986, with a haul of $2.8 billion in fiscal 2018 alone — $2.5 billion of which came from operators in the health care space.

Vanguard will also enter into a Corporate Integrity Agreement with the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG), under which a government-appointed monitor will observe the company’s care quality over the next five years.

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