LHC Group Acquires Embattled Provider for $5.7 Million

The Kentucky home health agency that infamously used tequila and Taylor Swift concert tickets as kickbacks has been sold to one of the nation’s largest home health and hospice providers.

A U.S. Bankruptcy Court judge recently approved the sale of Lexington, Kentucky-based Nurses’ Registry and Home Health Corp. to LHC Group (NASDAQ: LHCG) for $5.7 million.

Judge Gregory R. Schaaf, in an order authorizing the sale of Nurses’ Registry, said LHC Group’s proposed purchase “is fair and reasonable, represents the highest and best offer for the purchased assets, and is in the best interests of the debtor, its creditors and its estate,” the Lexington Herald-Leader reported.

Lafayette, Louisiana-based LHC Group is a provider of hospice, home health and comprehensive post-acute health care services with locations in 29 states.

According to an order approving the settlement agreement, 30% of the net sale proceeds is set to go to the bankruptcy estate, and 70% is set to go to the U.S. government, the Lexington Herald-Leader reported.

A different company, Atlanta-based Five Points Healthcare LLC, had submitted a $3.5 million bid for Nurses’ Registry at a court-authorized auction, but its bid was not accepted.

The sale of Nurses’ Registry comes as part of a civil judgment against the company, which marked the end of an investigation and False Claims Act litigation asserting that Nurses’ Registry fraudulently billed Medicare for medically unnecessary home health services, in addition to services involving kickbacks to local doctors who referred patients to Nurses’ Registry.

Federal authorities and whistleblowers had alleged that under the direction of its former owner, Lennie House, Nurses’ Registry took part in systematic false billing that permitted them to wrongfully obtain millions of dollars from the Medicare program from 2004 to 2011.

Nurses’ Registry and its late founder, Lennie House, also gave tickets to concerts and athletic events to referral sources in order to reward or encourage patient referrals.

Written by Mary Kate Nelson