Health Law Alert: "Worthless Services" May Create Liability Under False Claims Act


Health care providers should take note of a recent federal court decision from Kentucky, in which the court refused to dismiss a False Claims Act (FCA) case based on a theory that the provider had billed the Medicare and Medicaid programs for "worthless services." Under this theory, when a provider bills the federal government for a service that the provider knows, or should know, has no value, the provider is liable for making a false claim.

In U.S. v. Villaspring Health Care Center, Inc., 2011 WL 6337455 (E.D. Ky. Dec. 19, 2011), the court concluded that the federal government could proceed with FCA litigation based on allegations that a nursing home had billed the Medicare and Medicaid programs for worthless services. According to the court, when proceeding under a worthless services theory, "[i]t is not necessary to show that the services were completely lacking; rather, it is also sufficient to show that 'patients were not provided the quality of care' which meets the statutory standard." That decision does not stand alone. The Villaspring court relied on an earlier case that endorsed the use of the worthless services theory against a health care provider, i.e., U.S. v. NHC Health Care Corp., 163 F. Supp. 2d 1051 (W.D. Mo. 2001). Numerous other courts have recognized the general principle that knowingly billing the government for worthless services is tantamount to billing for services that were not provided, which is a false claim in violation of the FCA.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ober|Kaler | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.