Preferred Care settles for $540,000 in whistleblower upcoding case

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Nursing home chain Preferred Care agreed to settle False Claims Act charges for $540,000, the Department of Justice has announced.

Federal officials accused the company of upcoding Medicare beneficiaries between July 2012 and October 2017, and of providing “worthless services” at Kentucky's Stanton Nursing and Rehabilitation Center for three years.

The allegations were originally made in whistleblower lawsuits by former employees, who will split $175,000 of the settlement, according to court documents. Preferred Care also will pay $100,000 to one and $25,000 to the other in legal fees.

Preferred Care, which owns or operates 100 skilled nursing facilities, declared bankruptcy last November. A bankruptcy court approved the settlement on June 26. As part of the settlement, the company does not have to admit to liability.

The investigation took place through the U.S. Attorney's Office for the Eastern District of Kentucky, U.S. Department of Justice Civil Division's Commercial Litigation Branch, Office of Inspector General of the U.S. Department of Health and Human Services, and Kentucky Attorney General's Office of Medicaid Fraud and Abuse.