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$3.1 million judgment entered against five rural home health providers in Iowa and South Dakota

Federal courthouse, Northern District of Iowa in Cedar Rapids

CEDAR RAPIDS – On October 16, 2019, a federal court in Cedar Rapids entered a consent judgment for a total of $3,133,282.95 against five home health providers located in Iowa and South Dakota.  The providers – Sergeant Bluff Healthcare, LLC (Iowa); Red Oak Healthcare, LLC (Iowa); Logan Healthcare, LLC (Iowa); Elk Point Health Care #1 LLC (South Dakota); and Flandreau Healthcare 2, LLC (South Dakota) – provided home health services to Medicare beneficiaries.

In a complaint filed on October 2, 2019, the United States alleged that, between January 2012 and December 2015, the five companies submitted false claims to Medicare for therapy services.  The complaint alleged the claims were false either because the services provided were not skilled or because the beneficiaries’ medical conditions did not justify the need for skilled therapy services.  The United States further alleged that the companies received notifications that their claims for therapy services were inordinately high and that the companies failed to take adequate steps to address their billing procedures after receiving the notifications.

In a civil judgment filed in federal court in Cedar Rapids on October 16, 2019, judgment was entered against each entity as follows: Sergeant Bluff Healthcare, LLC ($1,245,149.01); Red Oak Healthcare, LLC ($228,333.42); Logan Healthcare, LLC ($775,373.15); Elk Point Healthcare #1, LLC ($788,484.69); and Flandreau Healthcare 2, LLC ($115,942.46).  The entities are all affiliates of Welcov Healthcare, LLC, a Minnesota entity in the midst of assignment proceedings in Hennepin County (Minnesota) District Court.

The matter arose from an affirmative investigation. False Claims Act cases can also be brought under the qui tam provisions of the Act, which encourage whistleblowers to bring suit on behalf of the United States and share in any financial recovery.

The case was handled by Assistant United States Attorneys from three different United States Attorney’s Offices: Jacob Schunk, Northern District of Iowa (United States Attorney Peter E. Deegan, Jr.); Meghan Roche, District of South Dakota (United States Attorney Ron Parsons); and David Faith, II, Southern District of Iowa (United States Attorney Marc L. Krickbaum).  The Department of Health and Human Services Office of Inspector General led the investigation.

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