Home Memphis Press Releases 2011 United States Awarded $82.6 Million Against Renal Care Group and Fresenius Medical Care in Medicare Fraud Case ...

United States Awarded $82.6 Million Against Renal Care Group and Fresenius Medical Care in Medicare Fraud Case

U.S. Attorney’s Office May 26, 2011
  • Middle District of Tennessee (615) 736-5151

The United States was awarded $82,642,592 plus costs today in a “whistle-blower” case after U.S. District Court Judge William J. Haynes, Jr. found Renal Care Group (RCG), Renal Care Group Supply Company (RCGSC), and Fresenius Medical Care Holdings, Inc. (FMC) recklessly disregarded federal law when billing the Medicare program for home dialysis supplies and equipment from 1999 to 2005. The case was filed in St. Louis in 2005 and was subsequently transferred to the Middle District of Tennessee.

“We are pleased with the court’s ruling and hope it sends a message to the local health care community that the Department of Justice will aggressively pursue fraud and abuse and protect the taxpayers’ interests,” said Jerry E. Martin, United States Attorney for the Middle District of Tennessee.

The court’s orders in this case discuss the concerns of multiple RCG employees who complained about the operation and Medicare billing activity of the RCGSC, including one regional manager who wrote, “I do not wish to go to jail,” and felt the company’s actions “were not in the best interests of patients,” after receiving a corporate directive about converting patients into the RCGSC.

Renal Care Group argued that they did not violate Medicare rules because of industry standards and certain disclosures to Medicare that RCG claimed to have made. However, the court rejected those arguments because of the clarity of the Medicare requirements and RCG’s reckless disregard for Medicare’s legal mandates. The court stated that the “Defendants cannot effectively set aside those commands by their cited interactions with Medicare officials.” The court further noted that RCG failed to heed the advice of the company’s lawyers when operating the supply company, and also 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.

Renal Care Group was a publicly traded, for-profit corporation and dialysis provider until it merged with dialysis industry competitor Fresenius Medical Care. RCG had it’s principal place of business in Nashville, Tennessee, and had locations throughout Missouri, including multiple facilities around the St. Louis metropolitan area. RCGSC was a Tennessee corporation that was owned and operated by RCG. In August 2009, a District Court judge in St. Louis transferred the case to the Middle District of Tennessee for trial, finding that a trial in Nashville, Tennessee would be more convenient for many witnesses.

FMC now owns and operates RCG’s dialysis facilities after the merger with RCG. RCG and FMC provided renal dialysis and related services to patients with End-Stage Renal Disease (ESRD). ESRD is a life threatening condition in which a patient’s kidneys are unable to remove toxins from the blood, thus necessitating some form of dialysis treatment. This condition is often suffered by patients who have experienced chronic kidney disease over a period of time. The government’s Medicare program generally provides coverage for ESRD patients.

The government’s complaint alleged that between January 1999 and December 2005, RCGSC submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment. All of these claims, as well as related claims for support services rendered by RCG dialysis clinics were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients. Under federal law, the Medicare program pays companies that provide dialysis supplies to ESRD 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. Defendants set up a sham billing company, RCGSC, that was not independent from RCG. Further, RCG interfered with ESRD patients’ choice of supply options, requiring patients to “move” to RCGSC. Even after RCG employees raised concerns and industry competitors closed their supply companies, RCG kept RCGSC open because of the illicit revenue it created.

The case was investigated by Federal Bureau of Investigation and the Office of Inspector General for the Department of Health and Human Services. The case was litigated by attorneys in the United States Attorney’s Office in the Eastern District of Missouri, Assistant United States Attorney Lisa Rivera of the Middle District of Tennessee, and John Henebery of the Civil Division of the United States Department of Justice.

This content has been reproduced from its original source.