Georgia psychotherapy services provider to pay $2 million to resolve false claims allegations

ATLANTA – Carenow Services, LLC, a Roswell-based psychotherapy services provider, as well as its CEO Leena Karun (collectively “Carenow”), have agreed to pay $2 million to settle allegations that they violated the False Claims Act by billing Medicare and Medicaid for psychotherapy sessions at nursing homes and skilled nursing facilities that were medically unnecessary, improperly documented, or billed at higher intensity levels than justified (a practice known as upcoding).

“Indiscriminately billing the government for psychotherapy services without regard to medical need or intensity of treatment deprives taxpayers of precious federal healthcare resources,” said Acting U.S. Attorney Kurt R. Erskine. “We remain committed to investigating healthcare fraud, particularly those schemes that target the most vulnerable in our communities. Those who commit healthcare fraud should know that they risk significant fines, penalties and even federal prison time.”

“Hopefully, the False Claims Act settlement in this case will be a deterrent to anyone thinking about abusing federal healthcare programs for their own benefit,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI is determined to protect taxpaying citizens and those who need federal help for their healthcare needs.”

“Carenow Services allegedly exploited not only its access to Federal health care dollars, but also its relationship with nursing facility residents in need of psychological services,” said Derrick L. Jackson, Special Agent in Charge with the Department of Health and Human Services Office of Inspector General. “Fraudulently billing Medicare and Medicaid for personal gain cheats millions of people who fund the programs or depend on their services. With our law enforcement partners, HHS-OIG unceasingly carries out our mission to protect these programs, in part, by bringing to justice those who bilk them.”

“Our Medicaid Fraud Division, in cooperation with our state and federal enforcement agencies, will remain vigilant in maintaining the integrity of public programs and prosecuting those who steal from taxpayers,” said Georgia Attorney General Chris Carr.

The settlement resolves False Claims Act allegations that between 2012 and 2018, Carenow billed Medicare and Medicaid for psychotherapy sessions at nursing homes and skilled nursing facilities that did not have any documented medical necessity. Additionally, in those situations where the psychotherapy sessions were medically necessary, Carenow allegedly upcoded its services and billed Medicare and Medicaid at higher reimbursing procedural codes. Consistent with the Justice Manual, the settlement includes credit to Carenow for immediately cooperating with the government in this investigation and for promptly taking steps to remediate the conduct described above.

This settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia styled United States and Georgia ex rel. Whitaker v. Carenow Services, LLC, No. 1:17-CV-1314-ELR (N.D. Ga.) by a former Carenow employee under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf the United States and obtain a portion of the government’s recovery. The whistleblower in this case will receive a share of the government’s recovery.

This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the Georgia Medicaid Fraud Control Unit, and Health and Human Services—Office of the Inspector General, and the Federal Bureau of Investigations.

The civil settlement was reached by Assistant U.S. Attorney Armen Adzhemyan, who is the civil Elder Justice Coordinator, and Georgia Assistant Attorney General Sara Vann. The claims resolved by this settlement are allegations only and there has been no determination of liability.

For further information, please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Department of Justice Action Center