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.

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