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Tennessee Home Health Care Agency to Pay $25 Million to Settle Whistleblower Suit Alleging Medicare and Medicaid Fraud


New York, November 12, 2014, New York - Milberg LLP today announced that the United States Department of Justice, the Tennessee Office of the Attorney General and Reporter and a whistleblower represented by the firm have reached an agreement with Tennessee-based CareAll Management LLC and its affiliated entities ("CareAll") to resolve civil fraud liability under the Federal False Claims Act ("FCA") and the Tennessee Medicaid False Claims Act ("Tennessee MFCA") for $25 million, plus interest. The settlement also required CareAll to be bound by the terms of an enhanced and extended corporate integrity agreement with the Department of Health and Human Services - Office of the Inspector General ("HHS-OIG") to avoid future fraud and compliance failures.

The government intervened in a whistleblower (" qui tam") lawsuit brought by Toney Gonzales, a registered nurse who was the Director of Services for CareAll's Knoxville Office from June 2011 to January 2012. Mr. Gonzales alleged, among other things, that CareAll: (1) upcoded patients' conditions on OASIS and 485 forms resulting in fraudulent billings to Medicare and Medicaid, and (2) provided home health services to patients who were not homebound and when services were not medically necessary.

Milberg partner Anna C. Dover and local counsel Michael Hamilton of the Provost Umphrey Law Firm LLP represented Mr. Gonzales in his lawsuit against CareAll. Mr. Gonzales will receive $3.9 million as his share of the government's recovery.

The lawsuit was filed in April 2012 in the Middle District of Tennessee under the FCA and was amended in August 2014 to include allegations pursuant to the Tennessee MFCA. The FCA and the Tennessee MFCA permit private parties to sue on behalf of the federal and state governments when they believe an individual or company has submitted false claims for government funds.

"We are thrilled with this result. The combination of tireless government attorneys working with a stellar whistleblower and his attorneys embodies the public/private partnership contemplated by the False Claims Act and demonstrates how workers at any level within a company can make a difference by exposing fraud." said Milberg partner Anna C. Dover.

The government was represented by Assistant U.S. Attorney Christopher Sabis of the U.S. Attorney's Office for the Middle District of Tennessee in Nashville and Trial Attorney Susan Lynch of the Civil Division of the U.S. Department of Justice and was assisted by agents from the HHS-IOG and the Tennessee Bureau of Investigation.

The case is docketed as United States ex rel. Toney Gonzales v. J.W. Carell Enterprises, Inc., et al., No.12-cv-00389 (M.D. Tn.).

For more information about the case, please contact Anna C. Dover at adover@milberg.com or (212) 594-5300.

About Milberg

Founded in 1965, Milberg LLP is widely recognized as a leading class action and complex litigation firm, representing individual and institutional investors, unions, consumers, and whistleblowers. In addition to having litigated landmark cases resulting in groundbreaking legal precedents and corporate governance reforms benefitting shareholders, Milberg also maintains an active whistleblower, or " qui tam," practice. Milberg has returned hundreds of millions of dollars to federal and state treasuries in both intervened and non-intervened qui tam cases, including United States ex rel. Mortgage Now, Inc. v. Bank of America Corp. (WD NC 3:12cv360-MOC-DSC) (Relator's action alleging that Bank of America had improperly recouped insurance proceeds from HUD to which it was not entitled was settled as part of the $16.65 billion global settlement regarding Bank of America's mortgage practices - the largest civil settlement with a single entity in American history) and Mason v. Medline Industries, Inc., et al., No. 07-cv-5615 (N.D. Ill.) (Government declined to intervene in Relator's action alleging unlawful kickbacks, bribes, and other illegal remuneration to induce health care providers to continue to purchase defendant's medical supplies and yet the case settled for $85 million - one of the largest settlements of a non-intervened FCA case to date).

If you would like more information about Milberg and our practice areas, please visit our website ( www.milberg.com).