Home health provider LHC Group Inc. will pay $65 million to settle a civil inquiry with the federal government over whether some government-reimbursed patient care was medically necessary, the company and the U.S. Justice Department said Friday.
In the agreement, LHC Group did not admit wrongdoing and said it still disputes the claims. The company said there were no findings that the company billed or received payments for services not rendered.
The Justice Department was handling a False Claims Act complaint under which private citizens can file sealed complaints on behalf of the government that allege government programs have been defrauded. Those who file the complaints can be given a share of any proceeds recovered.
The Justice Department said the whistleblower, Judy Master, will receive over $12 million. In a pre-market disclosure Friday, the company did not identify her, but said the complaint had been filed by a person who worked for a consulting firm LHC Group once used.
Master could not be located Friday for comment. Court documents concerning the case had not been entered into the record Friday and the Justice Department referred calls about Master to the U.S. Attorney's Office in Shreveport. A recording at that office said it was closed until Monday.
LHC said it chose to settle to avoid the expense of a drawn-out dispute. The inquiry centered on whether medical records, in some cases, properly documented medical necessity of some patient visits.
The Justice Department said it examined records of LHC Group home health visits to recipients of Medicaid, the Federal Employees Health Benefits programs and TRICARE, the military health service program. Allegations included that services were provided to patients who did not need them and others who were not homebound, the agency said.
The company also agreed to a compliance program including regular auditing and monitoring, a training program for its clerical staff on record-keeping requirements, an internal compliance department that will be involved in all company operations and an employee evaluation program linking performance reviews to compliance.
LHC Group said it would take a settlement charge during the third quarter that would reduce after-tax earnings by $41.3 million, or about $2.25 per share. The company said it would pay the settlement with $25 million in cash and the rest through its credit lines.
In Friday trading, LHC Group shares rose 17 cents to close at $17.06. The shares have traded in a 52-week range of $15.76 to $31.69.