U.S. Attorneys: Brentwood-Based Nursing Center to Pay Millions Over Forged TennCare and Medicare Claims


The Brentwood, Tennessee-based Diversicare Health Services, Inc., has agreed to pay $9.5 million to resolve allegations it violated the False Claims Act.

Company officials did this by knowingly submitting false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary, or skilled, the U.S. Department of Justice announced this week.

The settlement also resolves allegations that the company submitted forged pre-admission evaluations of patient need for skilled nursing services to TennCare, according to a press release.

Diversicare provides skilled nursing and rehabilitation services at approximately 74 facilities across the country.

“Families expect that their loved ones will receive the necessary care to improve their health and quality of life when they entrust them to a facility for care,” said U.S. Attorney Don Cochran, in the press release.

“Companies who engage in a practice of cheating and exploiting public healthcare programs, while subjecting patients to unreasonable and unnecessary treatments in order to increase their profits, will pay a substantial penalty.”

The government alleged that from January 1, 2010 through December 31, 2015, Diversicare’s corporate policies and practices were designed to place as many beneficiaries in the highest level of Medicare reimbursement—Ultra High—irrespective of the individual clinical needs of the patients.  These profit-driven policies and practices resulted in the provision of unreasonable, unnecessary, and unskilled therapy to many beneficiaries in Diversicare’s skilled nursing facilities, according to the press release.

“The government alleged that Diversicare submitted claims for Ultra High therapy levels despite evidence that (1) the frequency and duration of physical or occupational therapy were not reasonable or necessary for the patient, (2) the intensity of the physical or occupational therapy was inappropriate for the patient and not reasonable or necessary, (3) services did not require the skills of a therapist to perform them, and (4) speech therapy was medically unnecessary,” the press release said.

“This included specific instances of improper co-treatment in order to achieve minute thresholds, repetitive and unskilled exercises that did not match plan of care goals to obtain additional  minutes, engaging patients in activities contraindicated by underlying medical conditions, inflating Activities of Daily Living (ADL) scores and extending patient lengths of stay beyond what was medically indicated, billing for services that were not provided, using budgets, goals, and quotas to ensure Ultra High therapy was maximized, and threatening or undertaking adverse actions against employees if they failed to meet the budgets, goals, or quotas.”

The government also alleged that Diversicare submitted forged, photocopied, or pre-signed physician signatures on pre-admission evaluation certifications required in the submission of claims to TennCare for nursing facility services rendered to TennCare beneficiaries at its associated Tennessee skilled nursing and rehabilitation facilities.  TennCare is Tennessee’s Medicaid program jointly funded by the state of Tennessee and the federal government, the press release said.

As part of the settlement, Diversicare entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG requiring, among other things, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks.  The CIA requires training, auditing, and monitoring designed to address the conduct at issue in the case, the press release said.

“The settlement resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by former Diversicare employees,” according to the press release.

“The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The whistleblower reward in this case will be approximately $1.5 million.”

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected]
Photo “Diversicare” by Diversicare







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2 Thoughts to “U.S. Attorneys: Brentwood-Based Nursing Center to Pay Millions Over Forged TennCare and Medicare Claims”

  1. Nancy Auld

    They get away with it because there is an hierarchy in the nursing home system…..the low employee on the totem pole is the one that usually ends up with the disciplinary action/suspended or revoked license.
    The nursing homes are inspected annually by the state and most of them get deficiencies in care/safety and have to “fix” a lot of paperwork to stay in operation.
    It’s common practice in that industry to write the Care Plans for maximum payment.

  2. 83ragtop50

    Who is going to prison for these blatant criminal acts?