Home Birmingham Press Releases 2009 Civil Health Care Fraud Allegations Settled for $1.4 Million

Civil Health Care Fraud Allegations Settled for $1.4 Million

U.S. Attorney’s Office August 07, 2009
  • Northern District of Alabama (205) 244-2001

BIRMINGHAM—An investigation launched by a whistleblower complaint resulted today in the settlement of a civil health care fraud case and a $1,448,174 judgment against William “Bill” King Jr., Marie King, King & Associates, Inc., and SouthernCare, Inc., announced U.S. Attorney Joyce White Vance, the FBI and the U.S. Department of Health and Human Services.

Marie King, a registered nurse, managed, directed and operated King & Associates, Inc., which was in the business of providing consulting services to skilled nursing facilities in Alabama and other southeastern states. Bill King, an accountant, managed, directed and operated SouthernCare, Inc., doing business as King and Associates. SouthernCare was engaged in the business of preparing Medicare cost reports for skilled nursing facilities, including some of the skilled nursing facilities which used the services provided by King & Associates.

From 2002 until May 2007, the defendants caused false claims for utilization review (“UR”) services to be presented in cost reports to the Medicare Program. Although Medicare guidelines state that only payments made to physicians for their services on UR committees are allowable as cost claims for a skilled nursing facility, the Kings and their respective companies caused certain of their skilled nursing facility clients to present claims which overstated the amount of work performed by physicians. Those false claims increased the Medicare reimbursement to these clients, resulting in losses of over $740,000 to Medicare.

This matter was brought to the attention of the United States through the filing of a qui tam complaint under the False Claims Act. The act authorizes private parties to file suit against those who defraud the United States, and to receive a share of any recovery. The whistleblower was an accountant who worked for a company that prepared cost reports for the skilled nursing facilities, which had been clients of SouthernCare. After conducting its investigation, the United States, on April 30, 2008, intervened in the qui tam action with respect to Bill King, Marie King, King & Associates, and SouthernCare. The United States did not intervene with respect to other parties mentioned in the whistleblower’s complaint. On June 2, 2008, the United States filed its Complaint in Intervention against the Kings and their respective companies.

The settlement agreement filed today in the civil case provides that the United States will pay 19 percent of any amount received to the whistleblower who initiated the qui tam action. Additionally, the settlement agreement provides that the Kings and their companies will pay attorney’s fees and costs totaling $36,273.50 to the whistleblower’s counsel, Hare, Wynn, Newell & Newton, LLP. Bill King and Marie King have both also pled guilty and been sentenced for federal criminal violations related to these actions. In connection with those criminal matters, the Kings forfeited $600,000. Those funds will be applied to the $1,448,174 judgment.

“Whistleblowers who ignore potential harm to their careers and reputations when they notify the government of fraudulent conduct are a critical part of many investigations,” said U.S. Attorney Vance. “Without their assistance, fraudulent conduct might otherwise go undetected.”

Carl Bocchicchio, assistant special agent in charge, U.S. Department of Health and Human Services, Office of the Inspector General, said: “This investigation illustrates the effectiveness of pursuing a multi-facet approach in combating Medicare-fraud by utilizing the False Claims Act statutes and criminal prosecution. The two-prong approach produces positive results in protecting the Medicare trust fund and our beneficiaries.”

“This is not a victimless crime—every person who struggles to pay for health care benefits; every older person who worries about Medicare’s ability to cover them; every taxpayer who helps fund these programs—these are all victims,” said FBI Special Agent in Charge Patrick Maley. “The public should know that we will continue to work together to identify and stop those who would line their own pockets with taxpayer money-those who seek to benefit at the expense of our health care system, our economy, and our collective well-being.”

The HHS Office of the Inspector General and the FBI investigated the case. Assistant United States Attorney Lloyd Peeples represented the United States in both the civil and criminal matters.