Vanguard to pay $18M to settle allegations it defrauded Medicare, Tennessee Medicaid

Caregiver end of life care nursing home palliative care
Vanguard has agreed to pay $18 million for fraudulent claims at six skilled nursing facilities. (Getty/KatarzynaBialasiewicz)

Vanguard Healthcare LLC has agreed to pay more than $18 million to resolve a Medicare and Medicaid fraud case, the Department of Justice announced.

The company billed Medicare and Medicaid for “grossly substandard” nursing home services, according to an announcement from DOJ. As a result, several Vanguard entities have reorganized in bankruptcy and agreed to pay more than $5.1 million toward the settlement. 

Two other company entities are liquidating in order to pay $13.5 million in allowed claims. 

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The agreement has also ended a claim brought by the U.S. against Vanguard’s majority owner, CEO William Orand, and Mark Miller, the company’s former director of operations. The two parties will pay $250,000, DOJ said.

RELATED: Cognizant to pay $25M to settle civil case related to former executives' bribery scheme

“Seniors rely on the Medicare and Medicaid programs to provide them with quality care and to ensure that they are treated with dignity and respect,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said in a statement. “The Department will not tolerate nursing home operators that put their own economic gain ahead of the needs of their residents, and will continue to aggressively pursue those operators who bill Medicare and Medicaid for substandard nursing services.”  

According to the suit, originally filed in 2016, five Vanguard-owned skilled nursing facilities submitted false claims and specifically, the facilities:

  • Failed to administer medications as prescribed.
  • Failed to provide infection control.
  • Failed to provide would care as ordered.
  • Failed to take measures to prevent pressure ulcers.
  • Used physical restraints on residents.
  • Failed to meet basic nutrition and hygiene requirements.

In addition, the companies and owners were accused of submitting preadmission forms to Tennessee’s Medicaid Program with forged nurse or physician signatures. The improper billing occurred between 2010 and 2015.

Tennessee officials also brought suit under a similar law called the Tennessee Medicaid False Claims Act. 

RELATED: Uncertainty surrounds healthcare fraud enforcement. Here are some trends to watch in 2019

Vanguard will now be bound to a quality of care agreement with the Department of Health and Human Services for the next five years, along with other heightened compliance obligations. 

Overall, the government anticipates the recovery case will cost the U.S. more than $6 million. 

Vanguard is not the only company under scrutiny by DHHS for its billing at skilled nursing facilities. Earlier this month, the Office of Inspector General (OIG) estimated that the Centers for Medicare & Medicaid Services paid $84 million for skilled nursing facility services not meeting its three-day rule between 2013 and 2015.

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