On November 8, 2011, the U.S. Attorney’s Office for the Middle District of Tennessee announced a $2 million False Claims Act settlement with Vanguard Health Care, LLC and its subsidiaries Vanguard Health Care Ancillary Services, LLC and Vanguard Healthcare Services, LLC (collectively “Vanguard”) stemming from allegations that Vanguard double-billed Medicare and Tennessee Medicaid for enteral feeding services and supplies provided to patients in skilled nursing facilities as well as other claims.  Vanguard has also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services-Office of Inspector General.

The allegations against Vanguard were raised in a qui tam suit filed by a former director of operations at one of Vanguard’s skilled nursing facilities.  The suit was captioned United States ex rel. Caldwell v. Vanguard Healthcare Ancillary Services LLC (M.D. Tenn. No. 3:03-cv-437).  The Settlement Agreement outlines three claims pursued by the United States and defined as “Covered Conduct”:

  • “Vanguard’s submission of claims to Medicare for enteral therapy goods and services that were also billed to the Tennessee and Mississippi Medicaid Programs”;
  • “Vanguard’s submission of claims to Medicare for certain free items, namely pumps used to deliver nutritional products and [IV poles] that Vanguard had received at no cost from a third party supplier in order to induce referrals”; and
  • “Vanguard’s failure to disclose related parties to Medicare and Tennessee and Mississippi Medicaid.”  Vanguard failed to disclose the relationship between its SNFs which billed the state Medicaid programs and “its alter ego Vanguard Health Care Ancillary Services, which billed Medicare Part B for the same enteral therapy goods and services.”

The settlement amount is structured as a $2 million payment by Vanguard, with $1,880,619.02 being paid to the United States and $119,380.98 to the State of Tennessee.  Of the $2 million, the whistleblower will receive $400,000.  Vanguard also will pay the whistleblower’s lawyers $173,000 for their fees and expenses.

The Second Amended Complaint is available by clicking here, the Settlement Agreement is available by clicking here, and the CIA is available by clicking here