Nurses’ Registry: Fabricated Records and Tickets for Referrals

The Nurses Registry home health fraud case ended in a $16 million agreed civil judgment over allegations of unnecessary care, fabricated medical records and kickbacks for Medicare referrals. The government alleged that employees forged physician signatures, kept patients on service after eligibility ended, and delivered benefits to referral sources. For someone inside a home health agency, the connection is familiar: the patient chart, the physician’s approval and the business of bringing in the next referral.

Nurses’ Registry and Home Health Corporation provided home health care in Central Kentucky. The company and its deceased former owner’s estate agreed to the judgment announced by the U.S. Attorney’s Office on October 1, 2015. The agency’s executive director had reached a separate settlement earlier that year.

Two former employees brought the qui tam case. The government joined it and expanded the allegations to include benefits for physicians and other referral sources. That combination matters. A clinical employee may see a patient kept on service, while a marketing employee sees what the agency is offering to keep referrals coming.

The Patient Record Allegedly Changed to Fit the Bill

The government alleged that Nurses’ Registry falsified medical records to make patients appear homebound or in need of skilled nursing or therapy. Its account covered billing from 2004 through 2011, under the direction of the agency’s former owner.

The payment requirement made those representations valuable. As the Justice Department explained in its announcement, Medicare required a physician-signed plan of care certifying that the patient was homebound and reasonably needed skilled nursing or qualifying therapy before paying for home health services. The government alleged that Nurses’ Registry manufactured the clinical support for that payment.

The allegation reached the physician’s supposed approval, too:

We see a basic inversion in that allegation. The chart was supposed to explain why the patient needed care. Instead, the government said, the agency changed the chart to make the patient qualify for a bill.

The court’s account of the whistleblower complaint adds another part of the alleged mechanism: upcoding the severity of patients’ conditions so Medicare would pay for more expensive services. The employees also alleged that the agency provided unnecessary services and retained patients who no longer needed them. Those are different ways to change what Medicare is being asked to buy, and each points to a different decision inside the agency.

Recertification Allegedly Kept the Claims Coming

Nurses’ Registry allegedly recertified patients for further services long after they stopped meeting Medicare’s eligibility requirements. The government said the former owner directed that practice and that the agency billed Medicare for the continued care.

In this case, the alleged problem extended beyond the decision to admit someone. It reached the later decision to keep that person on service and keep billing. For a nurse or therapist who knew the patient’s condition, that is a concrete point of comparison: the clinical need they observed against the continued services the agency claimed were necessary.

Concert Tickets, Liquor and Medicare Referrals

The government alleged that Nurses’ Registry supplied tickets, liquor and other benefits to induce or reward patient referrals. Physicians allegedly contacted the agency to request tickets to concerts and athletic events, including the Kentucky Derby. The former owner allegedly directed marketing employees to deliver bottles of liquor and other enticements to referral sources to secure more valuable referrals that could be billed to Medicare.

Physicians allegedly treated a home health agency as a ticket service. We see the absurdity in that exchange: entertainment for the physician, healthcare bills for the public.

The referral allegations also involved compensation. In the separate executive director settlement announced July 7, 2015, the government alleged that the executive director compensated three local physicians who referred patients to Nurses’ Registry between March 2006 and April 2010. The agency then sought Medicare payment for services to those patients.

The government alleged violations of the Anti-Kickback Statute and the Stark Law in the company case. Its complaint connected referral benefits and physician financial relationships to the resulting Medicare claims. The clinical question and the referral-payment question belong alongside each other: what care did the patient qualify for, and what did the agency give the source of that patient?

For a marketing employee, the relevant knowledge may be an instruction to deliver a benefit and the referrals the agency expected in return. For someone in a physician’s office, it may be the request that preceded the referral.

From the Insider’s Account to the Medicare Bills

The employees described the operation from inside. According to the court’s account of the government complaint, the government added representative claims for payment to their account of upcoding, improper recertification and unnecessary services. Those particular bills connected the alleged scheme to what Medicare was asked to pay.

A nurse may know what the patient needed. A marketing employee may know what a referral source received. Our work with an insider is to connect that knowledge to the decisions and payments behind the claims. You do not have to untangle the clinical and referral arrangements alone.

The Company Judgment and the Executive’s Settlement

The company and the former owner’s estate agreed to a civil judgment with proceeds from asset sales going to the government. The executive director’s separate settlement required her to pay $1,082,416 to resolve the physician-compensation allegations against her. The July announcement expressly left the government’s claims against the company and the estate for a later resolution.

The October announcement supplied that resolution. It described terms requiring the company to be sold to an independent third party within 90 days, with 70% of net sale proceeds going to the federal government. The estate had one year to sell its assets and turn over 75% of the net proceeds. The Justice Department also said the former employees would receive a share of the settlement proceeds under the False Claims Act.

The Earlier Settlement and the Later Allegations

Nurses’ Registry had an earlier settlement in 2005 covering different billing years. The court described that agreement as addressing claims to Medicare and Medicaid for home health services during 1997 through 2003, including alleged upcoding and services to patients who were not homebound.

The later whistleblower case concerned a different period. The former employees alleged unnecessary care, inflated patient severity and continued services after patients no longer needed them. When the government joined, it added allegations about referral benefits and named the owner and the agency’s secretary, who was also an executive director, as individual defendants. We see the same problem returning in the allegations: a settlement over inflated severity and patients who were not homebound, followed by another case alleging that the agency made patients look eligible for more care.

The investigation before the government’s complaint involved the Department of Health and Human Services Office of Inspector General, the FBI, the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit, and the U.S. Attorney’s Office. The employees’ case supplied the starting point.

The Same Records Problems in Other Home Health Cases

Other home health cases show why both clinical records and referral arrangements deserve attention. Each exposes a particular connection between what happened inside a business and what the government was asked to pay.

At Advanced Professional Home Health Care, the government alleged that physician dates on home health records had been altered to support Medicare payment. Its October 2014 civil resolution illustrates a different way to change the certification record. In Nurses’ Registry, the government described forged physician signatures. In the Advanced Professional allegations, it was the date attached to the physician’s record that changed.

The referral comparison is A Plus Home Health Care. In settlements announced in 2014 and 2015, the government alleged that physicians’ spouses held nominal marketing jobs requiring little or no real work, with compensation tied to referral expectations. A marketing payroll entry can explain the same alleged exchange as a ticket request: something of value for access to Medicare patients. The form of the benefit changes where an insider would see it.

Speqtrum supplies a Medicaid comparison. The government established civil liability for unauthorized plans of care and false or inflated service billing. The court’s account connects the supporting records to the services charged to the District of Columbia Medicaid program. The program was different, but the practical connection is recognizable: the plan, the claimed work and the bill have to be read together.

The Whistleblower’s Share of the Recovery

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Nurses’ Registry case began with former employees who knew how the agency operated.

You Know What Happened Before the Bill

If you saw patient records rewritten, signatures used without approval or benefits delivered for referrals, talk with our whistleblower experts about your agency. We work with you to build your strongest home health whistleblower case, bring in home health fraud whistleblower lawyers who understand Medicare certification and referral payments, and stay beside you throughout the case.