United States And Tennessee File Suit Against Curo Health Services And Related Entities

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NASHVILLE – The United States and Tennessee today filed a consolidated complaint in intervention alleging violations of the False Claims Act and the Tennessee Medicaid False Claims Act by Curo Health Services Holdings, Inc., Curo Health Services, LLC, TNMO Healthcare, LLC (d/b/a Avalon Hospice), and Regency Healthcare Group, LLC, announced Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee and Tennessee Attorney General Herbert Slatery III.  The complaint also states common law claims, including unjust enrichment and payment under mistake of fact.

As set forth in detail in the complaint, since at least 2010, the defendants violated the False Claims Act and the Tennessee Medicaid False Claims Act by knowingly submitting or causing to be submitted false claims, and knowingly and improperly concealing or avoiding Avalon’s obligation to repay overpayments, for hospice services provided to patients who were ineligible for the Medicare or Medicaid hospice benefit because they were not terminally ill. 

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The complaint alleges that the defendants pressured staff at their Tennessee hospice agencies to maximize admissions and census through aggressive financial targets and incentives, while simultaneously discouraging the discharge of patients who were no longer eligible for the Medicare or Medicaid hospice benefit.  Moreover, the complaint alleges that the defendants failed to ensure that physicians who provided legally required and material certifications and recertifications of patients’ terminal illnesses received or adequately considered complete and accurate information regarding patients’ conditions.  Furthermore, the complaint alleges that even after the defendants were made aware through internal complaints and audits that they had billed for hospice services provided to Medicare or Medicaid beneficiaries who were not hospice-eligible, they did not return Medicare or Medicaid payments they had received. 

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The governments began investigating the wrongdoing alleged in today’s complaint in response to lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act and the Tennessee Medicaid False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. 


The matter was investigated by the Department of Health and Human Services, Office of Inspector General, and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Assistant U.S. Attorneys Kaitlin E. Hazard and Wynn M. Shuford represent the United States, and Assistant Attorney General Scott Corley represents Tennessee.

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The claims alleged by the United States and Tennessee are allegations only, and there has been no determination of liability. The lawsuit is captioned United States and the State of Tennessee ex. rel. Lisa Pence, et al. v. Curo Health Services Holdings, Inc., et al., Case No. 3:13-cv-00672 (M.D. Tenn.).

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