Hyperion and AltaCare: The Nursing Home’s Landlord Brought the Case

The Hyperion AltaCare fraud case led to a $1.25 million settlement over alleged grossly substandard care at Oxford Health and Rehabilitation in Lumberton, Mississippi, from October 2005 through May 2012. The nursing home’s landlord, Academy Health Center, brought the whistleblower case. That makes this a case for people who know the business behind the care as well as those who work at the bedside.

What the Hyperion AltaCare Case Was About

The Department of Justice alleged staffing and basic-care failures at the nursing home. Hyperion Foundation billed Medicare and the Mississippi Medicaid program for services the government alleged were effectively worthless, while AltaCare managed the home under a contract with Hyperion. Hyperion allegedly submitted the false claims, and AltaCare and its chief executive officer allegedly caused them. Hyperion Foundation and AltaCare were among the companies that settled those allegations, and two executives also settled: Hyperion’s former president and AltaCare’s chief executive officer.

According to the government, Hyperion failed to meet residents’ nutritional needs, failed to give them their medications as their physicians prescribed, overmedicated them and hired too few staff to care for them. It also diverted Medicare and Medicaid funds to other entities affiliated with either executive, the government alleged, leaving the home unable to pay for its basic operations, including food, heat, air conditioning, pest control and cleaning. The government alleged that these failures caused residents to suffer pressure ulcers, falls, dehydration and malnutrition, among other physical, mental and emotional harms. Residents depended on the care, and taxpayers were paying for it. The alleged failures reached both.

The California Research Bureau described the broader health care problem in terms of a pattern:

That distinction puts the attention on care over time. In a case alleging staffing and basic-care failures, the useful comparison runs from residents’ needs to the people available to meet them, then to the care documented and billed. Clinical records and business records belong in the same account.

Why the Landlord Whistleblower Matters

Academy Health Center Inc. brought the Hyperion case as a landlord. The business behind the care supplied the whistleblower, putting the home’s contractual relationships alongside its clinical operations in this story.

A nursing home can involve a property owner receiving rent, a management company receiving fees, an operating company receiving payment for resident care, and contractors providing staff or services. Money paid for a resident’s care can pass through several businesses before it pays the people doing the work.

That separation explains why someone outside the clinical staff may have a useful view. A landlord may know the contractual responsibilities. A payroll employee may know the hours worked. A nurse may know what a resident needed and what happened on the shift. We look at how those accounts fit the claims and the decisions behind them.

The person making a business decision may be removed from the bedside and from the employee submitting the bill. For someone who knows the contracts, the question is how those decisions reached the care operation. That is a conversation our whistleblower experts can have with you.

What Evidence Is Needed to Prove Fraud?

For a nursing-home care case, useful evidence connects residents’ needs, actual care, staffing and government claims to the people making the decisions. Clinical notes, payroll, contracts and billing records can show different parts of the same operation. Connecting them to the claims is work we do with you.

The care record and the staffing record answer different questions. Nursing notes, orders and assessments describe residents’ needs and treatment. Payroll and time records show worked hours, while schedules describe planned coverage. The issue in a staffing-based care allegation is what those hours meant for the residents who needed help.

Business records give that comparison another dimension. Leases, management agreements and cost reports identify relationships and expenses beyond the nursing station. We use that picture to understand who controlled the decisions behind the billed care, including decisions made outside the facility itself.

In healthcare billing, the payer matters too. In a dually certified nursing home, a resident can receive a qualifying Medicare skilled stay and Medicaid-funded long-term care in the same building. The resident may remain in the same room while the payment basis changes. We connect the care account to the claim and payer for that period.

Huntsville Shows the Care-to-Claim Connection

Health Services Management paid $5 million in a separate settlement over allegations that Huntsville Health Care Center billed Medicare and Medicaid for worthless services and services it never provided. The Justice Department’s Huntsville announcement describes a whistleblower who worked at the home and alleged abuse, inadequate care and denial of basic services, including food and water.

The government said its investigation found services so deficient that they were considered worthless and potentially harmful to specific residents. Medicare and Medicaid had been billed for those services. The care failure and the payment were part of the same account.

Huntsville’s whistleblower saw the operation as an employee while Academy Health Center brought the Hyperion case as a landlord. Different positions inside and around a nursing-home business can reveal different parts of the payment story.

The Settlement and Whistleblower Reward

The Justice Department announced the Hyperion settlement on November 16, 2017. The government had intervened and taken over primary responsibility for the landlord’s lawsuit. When the settlement was announced, the amount the whistleblower would receive had not been determined. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Huntsville whistleblower received $1 million. That award went to an employee whose allegations concerned the care residents actually received, including basic services such as food and water. The employee’s view of daily care helped bring the government’s payments into question.

AltaCare and Cambridge House Home-Office Costs

AltaCare’s home-office costs were the subject of a separate Tennessee Comptroller audit announcement in 2019. The audit examined home-office expenses for 2014-2016, including costs assigned to Cambridge House.

Auditors identified $855,679 in expenses allocated to the home that could not be charged for reimbursement. Those costs produced an estimated $324,999 in Medicaid overpayments for July 2015 through June 2018. The costs originated at the home office, but their effect reached the facility’s Medicaid payments.

Here, the connection to payment ran through home-office expenses assigned to the nursing home. An accounting decision outside the care unit affected reimbursement for the facility. It gives the person who knows the business records another concrete reason to look beyond what happens at the bedside.

You Know the Business Behind the Care

If your clinical, payroll or contract records explain how a nursing home billed for care it failed to deliver, talk with our whistleblower experts about what you saw. We build the case with you, connect the care failures to the payment decisions, and bring in nursing-home fraud whistleblower lawyers who understand both. We stay beside you through every step.