A federal judge has dismissed False Claims allegations against eight skilled nursing facilities and their therapy partner, saying a would-be whistleblower didn’t offer enough detail to explain how a purported kickback scheme worked.
Former executive assistant and controller Terri Winnon brought the case against eight Texas nursing homes, their owners, several physicians and a rehab therapy company in 2017.
She alleged the nursing homes paid monthly medical director stipends to physicians to “illegally induce patient referrals,” with one facility also bribing physicians with meals and alcohol.
Winnon also accused the nursing homes of upcoding patients for more therapy minutes than necessary under the previous federal payment system, and said the facility owners had falsified Medicare cost reports.
The federal government last year declined to intervene in the case, meaning the whistleblower was left to pursue the fraud allegations on her own in the US District Court for the District of Columbia.
In an opinion posted Sept. 18, US District Judge Richard J. Leon ruled that in the case of the remuneration allegations, Winnon failed to sufficiently plead violations of the Anti-Kickback Statute. She “did not identify any false claims or submissions tied to specific tainted referrals,” the judge wrote.
Winnon had suspected the medical director appointments were a “sham” because the monthly payments didn’t fluctuate to match changing work loads. But the judge called that charge conclusory, meaning there was no supporting evidence.
Leon ruled similarly in the case of therapy upcoding, saying Winnon based her allegations on how many patients were receiving a “high” level of therapy compared with peer skilled nursing facilities. In fact, the judge said Winnon presented “far fewer” details than whistleblowers in similar therapy cases. With that, it could not be proven that the facilities intentionally overcharged the government for patient care.
Likewise, the judge said Winnon’s cost reporting claims were based largely on her beliefs and not evidence that would support the allegations in court. Winnon alleged that the nursing home owners Ramiro Lozano and Jay W. Balentine tried to include costs associated with two airplanes and a yacht in their nursing home expenses. That, she alleged, was an effort to hide assets from the government and avoid a payment that was due.
“However, the relator fails to provide even conclusory, but specific, factual allegations about the alleged repayment obligation,” wrote Leon, noting on that charge, especially, she was “woefully” short of meeting legal requirements to proceed.
