Vanguard Healthcare, a skilled nursing company based in Tennessee, will pay roughly $18 million in a settlement due to claims that it violated the False Claims Act by billing for substandard nursing home services.
The Department of Justice claims that Vanguard and its skilled nursing facilities delivered "worthless" services to residents between 2010 and 2015 and committed other violations, including the use of unnecessary physical restraints and failing to administer needed medications.
The DOJ called it the largest settlement of its kind in Tennessee history.
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The lawsuit further alleged that the defendants were responsible for the submission of hundreds of pre-admission forms by these facilities to TennCare, Tennessee's Medicaid program, which contained forged nurse or physician signatures.
Vanguard has denied the allegations.
The organization has been in fiscal straits as of late, with several of its related companies reorganizing in bankruptcy. The parent company and several of those reorganized companies will pay $5.1 million toward the settlement, while two Vanguard-owned entities that are liquidating in bankruptcy will spot $13.5 million in "allowed claims."
Due to the filing of bankruptcy proceedings by the Vanguard entities, the DOJ expects the total government recovery in this case will exceed about $6 million.
Vanguard will enter a five-year Corporate Integrity Agreement with the Office of the Inspector General, during which time the organization is to retain a quality of care monitor.
The False Claims Act imposes treble damages and penalties on those who submit false claims for federal funds.
Vanguard is a holding company that owns a chain of subsidiary skilled nursing facilities, including Boulevard Terrace Rehabilitation and Nursing Center in Murfreesboro, Tennessee; Glen Oaks Health and Rehabilitation in Shelbyville, Tennessee; and Manchester Health Care Center in Manchester, Tennessee.
Vanguard isn't the only healthcare entity that's been caught in the snares of the False Claims Act this year. In January it was announced that pharmacy giant Walgreens will pay nearly $270 million as part of two major settlements: one that alleged the company had improperly billed federal healthcare programs for insulin pens it distributed to beneficiaries who didn't need them; and another that alleged Walgreens failed to disclose and charge lower drug prices offered through a discount program.
Walgreens did not admit any wrongdoing as part of either settlement.