Home Health & Hospice Week

Matria shells out $9 million settlement.

Watch out: Disgruntled employees may have a better reason than ever to report you to the feds.

The relators in two qui tam suits against Matria Healthcare Inc. are receiving a whopping 22 percent of a $9 million settlement Matria reached with the federal government. Two former employees of the Marietta, GA-based disease management company's former wholly owned subsidiary, Diabetes Self Care Inc., filed suit against Matria for improper billing related to the mail order diabetic supplier, according to a release from one employee's attorneys.

One-time DSC customer service supervisor Sandra Clarke will receive nearly $1.2 million and former reimbursement director Kim Politsky will receive nearly $800,000, according to Politsky's attorneys, Mike Bothwell and Mark Simpson of Bothwell & Simpson in Roswell, GA. In two separate suits, Clarke and Polit-sky alleged a range of billing misdeeds, including billing durable medical equipment to Medicare without orders or documentation, not crediting Medicare for returned DME and falsifying documentation.

Who's next? Mail order suppliers should watch out for similar suits in the future. "The Matria settlement is the latest in a string of fraud settlements involving the mail-order diabetic supply industry," the release says.

Matria had announced the settlement earlier this year. The company says it took a $12 million charge in the quarter ended Dec. 31, 2005 for the settlement and other costs related to DSC. Matria sold the business in 2004.

The company reported a loss of $1.4 million on revenues of $48.6 million for the quarter, compared to a $1.6 million profit on $38.5 million in revenues for the same period in 2004. Stock prices for the company slipped about 10 percent after Matria disclosed its chief financial officer is resigning and a former executive from troubled HealthSouth Corp. is taking his place.

Matria also has acquired Rosemont, IL-based DM company CorSolutions Inc., the company notes.

• Patient privacy lapses continue to dog Portland, OR-based Providence Health System. In December, a thief stole 365,000 computer patient records from a Providence Home Services employee's vehicle (see Eli's HCW, Vol. XV, No. 6), triggering investigations and lawsuits. Now thieves in two car break-ins stole data on 122 home care and hospice patients from employees' laptops in Snohomish County, WA.

The employees weren't following company policy when they left the laptops in their cars unattended while they entered a patient's home and a store, respectively, The Oregonian newspaper reports.

"It's very frustrating," Providence exec Greg Van Pelt told The Oregonian. "We've had in-services on this. We've confirmed that with our managers. The policy is clear."

Providence has offered free identity and credit restoration and monitoring services to every affected patient and is adding encryption to home care employees' laptops to lock out unauthorized users, the paper says.

Three Providence employees have resigned and a fourth was fired after an internal review blamed them for security lapses that led to the December theft, according to the paper.

• VistaCare Inc. will be able to resume billing for hospice patients in its Terre Haute, IN office. Surveyors decertified the program last October (see Eli's HCW, Vol. XIV, No. 38). The Terre Haute program "successfully completed a follow-up state and Medicare survey" March 7, the for-profit hospice chain notes in a release.

The location can also accept new patients in addition to billing for current patients. VistaCare has been providing services to patients of the program without reimbursement since October, furnishing about $1 million in unreimbursed care, the Scottsdale, AZ-based company says.

VistaCare expects its Indianapolis office, which also was decertified, to begin accepting new patients by the end of the month. The company's "Bloomington office has been approved as an Alternative Delivery Site to the Indianapolis location which will allow it to serve patients out of both the Bloomington and Indianapolis offices," VistaCare explains.

• Don't forget to put the new CBSA codes on your claims with "to" dates of Jan. 1 or later, regional home health intermediary Cahaba GBA reminds home health agencies. "Home health providers are continuing to experience payment delays and billing errors for reason code 32038," Cahaba says in a message to providers. The code occurs when HHAs don't use the wage index codes for the new Core-Based Statistical Areas.

 • Medicare Modernization Act cuts have taken a bite out of American HomePatient's earnings. The Brentwood, TN-based respiratory and DME supplier reported net income of $1.7 million on revenues of $83.6 million for the quarter ended Dec. 31, 2005, compared to an $8.2 million profit on $84.2 million in revenues for the same period in 2004.

"Revenues and net income ... have been negatively impacted by the 2005 reimbursement changes associated with the MMA," the company says in a release. The oxygen, inhalation drug and DME cuts cost AHP about $4.3 million in net income for the quarter.

• Addus HealthCare Inc. is suing former CFO Ronald L. Ford, alleging he used company-issued credit cards to fraudulently charge about $68,000 of personal expenses, reports the Chicago Sun-Times.

But Ford claims Addus is just trying to harass him with the litigation. Ford now works for Addus competitor Help At Home Inc., and Addus has filed a separate suit against Ford and Help At Home, alleging violations of the Illinois Trade Secrets Act and other fair-competition laws, the newspaper says.

The credit card suit alleges Ford fraudulently used his card from 1998 to 2002 to cover vacation expenses, pay for a family member's college tuition, and purchase an electric dog fence and mattress and box springs. Addus seeks the return of the $68,000 plus more than $27,000 in bonus and life insurance payments.

• A federal jury in Houston has found a licensed Oklahoma osteopath guilty of 12 counts of health care fraud and one count of conspiracy, U.S. Attorney Chuck Rosenberg says in a release. Over a two-year period, Dr. Linda Kaye Morgan signed hundreds of pre-printed prescriptions for motorized wheelchairs and certificates of medical necessity, rarely evaluating the patients, prosecutors say. Morgan estimated that she received approximately $100,000 in cash from various marketers for her prescriptions.

Morgan's prescriptions have been linked to nearly $8 million in Medicare and Medicaid payments to more than 60 DME companies around the country, prosecutors say. Morgan faces up to 10 years of prison and a fine of up to $250,000 or both for the health care fraud conviction, and up to five years of prison, a fine of up to $250,000 or both for the conspiracy conviction.

• An Ohio HHA owner has pleaded guilty to health care fraud, money laundering, crack manufacturing and firearms possession during a drug crime, according to a release from Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio.

In a scheme defrauding Medicaid of more than $560,000, Community Home Health Care Inc. owner Kevin Dennis billed the program for skilled nursing and home health services that weren't performed. The health care fraud and money laundering charges each carry a penalty of up to 10 years imprisonment and a fine of up to $250,000.