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DOJ wants to dismiss health care fraud allegations

Few people savor being cast in the role of David in a battle with Goliath. But just as the ancient story turned out favorably for the underdog, so too do more modern tales.

No one has more resources than the federal government, so when the Department of Justice withdraws from a case involving allegations of fraudulent billing against a health care provider, it attracts attention.

The DOJ recently withdrew from a whistleblower case against HCR ManorCare Inc., a prominent provider of services such as assisted living, home health care, outpatient rehabilitation, IV care, and hospice services in a variety of care facilities.

The Ohio nursing home company set out to “game the Medicare system by pressuring and manipulating its employees into providing thousands of hours of unnecessary and useless therapy, so that ManorCare could reap millions of dollars in improper reimbursements,” the DOJ argued. But the department suddenly reversed course after it was ordered to pay ManorCare’s attorneys the cost of a filing. The DOJ then notified the U.S. District Court for the Eastern District of Virginia that they agreed that the case against ManorCare should be dismissed.

The attorney for the whistleblower was chagrined. “This was one of the biggest health-care fraud cases that the justice department had in litigation, certainly the biggest against nursing homes. Their philosophy is to jettison a case the first adverse ruling they get?”

ManorCare was also unambiguous: “To be perfectly clear, we are not settling the case,” the company’s chair and CEO wrote in an internal email. “The government is dismissing it fully and finally.”

It was a bad day for Goliath.