Healthcare Fraud: Health Services Management Inc. (HSM) Has Paid The United States To Resolve Claims That The Company Billed Medicaid Programs

Huntsville Nursing Home Pays the United States and the State of Texas $5 Million to Settle Claims Alleging Poor Quality of Care

HOUSTON – Health Services Management Inc. (HSM) has paid the United States $5 million to resolve claims that the company billed the Medicare and Medicaid programs for worthless services and for services that were never provided, announced Acting U.S. Attorney Abe Martinez. HSM is based in Murfreesboro, Tennessee, and owns and operates nursing homes throughout Texas and the United States. The claims resolved by the settlement are allegations only with no determination of liability.

The United States and Texas began the investigation following the filing of a qui tam, or whistleblower, lawsuit on Oct. 17, 2014. The whistleblower worked at Huntsville Health Care Center, a 92-bed nursing home and rehabilitation facility that HSM owned and operated. She claimed that during her employment, she witnessed patient abuse and neglect, inadequate care, physical and verbal abuse and denial of basic services, such as providing patients with food and water.

The investigation concluded that from Jan. 1, 2013, through Dec. 31, 2015, Huntsville Health Care Center billed for services that were not provided or which were so substandard and deficient that they were considered worthless and potentially harmful to specific Huntsville patients. The claims for payment to Medicare and Medicaid for those services were deemed to be fraudulent and submitted in violation of federal and state law.

“We take seriously the care of our most vulnerable citizens, the elderly and infirm,” said Martinez. “When providers accept federal funds for reimbursement, they have a duty and responsibility to provide the best care possible to the patient, especially when those patients are elderly and at times incapacitated. The United States Attorney’s Office (USAO) for the Southern District of Texas will aggressively hold those accountable who fail to provide the care that is expected when the failure to do so results in harm to the patients and the treasury.”

“It’s disturbing when a nursing home company accepts Medicare and Medicaid money to care for vulnerable nursing home residents and in return provides substandard care, as alleged in this case,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services – Office of Inspector General (DHHS-OIG). “We will continue to hold nursing homes accountable to give residents the quality health services, and living conditions, taxpayers pay them to provide.”

As part of the settlement, HSM also agreed to enter into a Corporate Integrity Agreement with DHHS-OIG.

Under the False Claims Act and the Texas Medicaid Fraud Prevention Act, a private party – known as a relator – can file an action on behalf of the United States and Texas and receive a portion of the recovery. In this case, the relator received $1 million.

The USAO, DHHS-OIG and the Texas Attorney General’s Office – Civil Medicaid Fraud Division conducted the investigation. Assistant U.S. Attorney Jill Venezia handled the matter.