A False Claims Lawsuit against Addus Homecare Inc. (Nasdaq: ADUS) will move forward, a judge said on February 3. The case alleges Addus engaged in several fraud schemes involving Medicare home health care patients.
Illinois-based Addus—along with Cigna Corporation, which is also named in the lawsuit—moved to dismiss the case, but the motion was rejected by a Northern District of Illinois judge. Cigna is the owner of Home Physicians Management, LLC, which does business as Alegis Care, which providers home physician services to the elderly and disabled in several states, according to court records. Addus provides home health care services in 19 states.
The case stems from a confidential whistleblower who was an Addus employee from November 2010 through April 2012. The lawsuit alleges that Addus and Cigna engaged in several fraud schemes, including providing kickbacks for paint referrals, falsely certifying compliance with the Anti-Kickback Statute, and submitting reimbursement claims and records to Medicare for services to unqualified patients.
While Addus is still named in the case, Cigna’s motion to dismiss was granted by the judge. Addus’ motion to dismiss was granted in part and denied in part, and the complainant has 21 days to file an amended complaint.
The suit alleges that members of Addus’ senior management team offered marketing services to an independent living facility to boost occupancy in exchange for referrals from these facilities for Medicare patients for skilled services. It is alleged Addus provided services for some patients who were not homebound and may not have been qualified for Medicare home health services.
In addition, Addus discussed starting similar referral schemes with other senior living companies, including Holiday Retirement, Senior Lifestyle Corporation and Sunrise Senior Living, among others, the suit alleges.
At the same time, Addus allegedly hired a doctor for patient referrals and solicited skilled services for all seniors, even if they did not meet Medicare’s requirements. Patients’ diagnoses were reportedly exaggerated and physicians were persuaded to sign documents to meet Medicare requirements.
The allegations come as Addus has recently undergone major restructuring, including several new executives.
Written by Amy Baxter