Nursing Home Management Firm CareOne Pays $700K to Settle False Claims Act Allegations

A management company that provided financial back-office services to health care facilities agreed to pay $714,996 to resolve allegations that it violated the False Claims Act — specifically related to claims for reimbursement of Medicare bad debt — acting U.S. attorney Rachael A. Honig announced this week.

The federal government through the U.S. Department of Justice and the Department of Health and Human Services’ Office of Inspector General alleged that CareOne Management LLC — now known as ABC1857 LLC — submitted claims for payment to the Centers for Medicare & Medicaid Services (CMS) for reimbursement of bad debt from Jan. 1, 2012 to July 2, 2018.

CareOne, the predecessor of ABC1857 LLC, provided similar back-office services to senior care centers, including long-term nursing care facilities, assisted living facilities, and home health care agencies, covering more than 20 properties in the state of New Jersey, according to the settlement agreement.


The government accused the company of falsely representing compliance with the applicable statutes and regulations. These included the “criteria for allowable bad debt,” which requires that a provider “be able to establish that reasonable collection efforts were made” for the amounts owed by beneficiaries before the claim was submitted as bad debt to Medicare.

As is common in FCA cases, the settlement agreement is not an admission of liability by CareOne, and the defendant “denies that it submitted or caused the submission of false claims or made false representations to Medicare regarding the reimbursement of bad debts,” according to the agreement.

The agreement was reached “to avoid the delay, uncertainty, inconvenience and expense of protracted litigation.”


“Our client is pleased to have resolved this lawsuit over technical issues around how patient bills are written off after collection attempts have failed,” CareOne’s legal representation, Bill Jordan of Alston & Bird LLP, said in a statement provided by e-mail to Skilled Nursing News on Friday. “Our client’s collection efforts actually exceeded those of its peers, but it chose to settle the lawsuit to avoid the distraction of dealing with protracted litigation over now-obsolete administrative practices. Our client looks forward to continuing its focus on providing the highest level of patient care in the safest environments throughout the Northeast.”

Of the $714,996 settlement, $391,242 consists of restitution.

The allegations were originally made in a lawsuit filed under the FCA’s whistleblower provisions by Margaret Gathman; she will receive $143,000 from the federal portion of the settlement.

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