HealthEssentials CEO agrees to $1 million settlement in False Claims suit

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Michael Barr, who co-founded the company now known as Kindred Healthcare, has agreed to pay $1 million in a settlement over Medicare fraud charges, the U.S. Department of Justice announced Monday.

The settlement is not related to Kindred but to another company that Barr led as chief executive officer, HealthEssentials Solutions Inc. The company provided primary care services to residents of long-term care facilities until it went bankrupt and ceased operations in 2005.

In 2008, HealthEssentials pleaded guilty to charges of Medicare overbilling and entered into a civil settlement with the government. By agreeing to the $1 million settlement, Barr has resolved charges related to that fraud without admitting liability, the DOJ stated. Barr also will be excluded from participating in federal health programs for three years.

Barr faced whistleblower charges that he pressured workers to inflate billings by conducting unneeded medical assessments and filing fraudulent claims. Another former HealthEssentials executive, Norman J. Pfaadt, has agreed to pay a $20,000 settlement, according to the DOJ.

Another company that Barr led, Vencor, also was involved in a high-profile Medicare fraud case. The long-term care provider paid $26 million related to those charges in 2001. The company subsequently went bankrupt and was re-organized into Kindred Healthcare, which now is one of the nation's largest LTC providers.

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