IN THE UNITED STATES DISTRICT COURT
`
`EASTERN DISTRICT OF TENNESSEE
`AT KNOXVILLE
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`UNITED STATES OF AMERICA ex rel.
`LEANN MARSHALL and
`VIB PARTNERS,
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`
` Plaintiffs and Relators,
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`vs.
`
`LHC GROUP, INC. and
`UNIVERSITY OF TENNESSEE
`MEDICAL CENTER HOME CARE
`SERVICES, LLC,
`
`
` Defendants.
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`Civil Action No. 3:17-cv-96
`Judge Collier
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`CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS
`OF FEDERAL FALSE CLAIMS ACT
`
`Jennifer M. Verkamp (admitted pro hac vice)
`Frederick M. Morgan, Jr. (admitted pro hac vice)
`Sonya A. Rao (pro hac vice being submitted)
`Ian M. Doig (pro hac vice being submitted)
`MORGAN VERKAMP LLC
`
` 35 East 7th Street, Suite 600
` Cincinnati, OH 45202
` Telephone: (513) 651-4400
` Fax: (513) 651-4405
` Email: jverkamp@morganverkamp.com
`
`
`rmorgan@morganverkamp.com
`
`
`
`
`David A. Burkhalter, II, TN BPR #004771
`
`D. Alexander Burkhalter, III, TN BPR #033642
`
`Zachary J. Burkhalter, TN BPR #035956
`
`The Burkhalter Law Firm, P.C.
`
`111 S. Central Street
`
`Knoxville, TN 37902
`
`Telephone: (865) 524-4974
`
`Fax: (865) 524-0172
`
`Email: david@burkhalterlaw.com
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`alex@burkhalterlaw.com
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`zach@burkhalterlaw.com
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`Case 3:17-cv-00096-CLC-DCP Document 40 Filed 08/17/20 Page 1 of 73 PageID #: 183
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`

`

`TABLE OF CONTENTS
`
`Page(s)
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`I.
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`II.
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`INTRODUCTION............................................................................................. 1
`
`JURISDICTION AND VENUE ....................................................................... 2
`
`III. PARTIES ........................................................................................................... 3
`
`IV. RULE 9(b), FED. R. CIV. P., ALLEGATIONS........................................................5
`
`
`V.
`
`RELEVANT LEGAL AND REGULATORY INFORMATION ............................6
`
`A. THE FALSE CLAIMS ACT ...................................................................................6
`
`B. THE MEDICARE PROGRAM ...............................................................................7
`
`VI. MATERIAL REQUIREMENTS APPLICABLE TO GOVERNMENT
`PAYMENT FOR HOME HEALTH SERVICES .....................................................8
`
`A. OASIS ASSESSMENTS DETERMINE THE AMOUNT CMS PAYS FOR
`HOME HEALTH SERVICES .................................................................................9
`
`1. Medicare Home Health PPS Billing & Payment Methodology.......................11
`2. Case Mix Determines Adjustment of the National Standardized
`Episodic Rate and is Based on the OASIS Instrument ....................................14
`
`B. MEDICARE PAYS ONLY FOR MEDICALLY NECESSARY SERVICES ......18
`
`C. MEDICARE HOME HEALTH STAR RATING SYSTEM .................................19
`
`VII. FACTS ........................................................................................................................21
`
`A. OVERVIEW OF LHC AND ITS CORPORATE PROCESS ...............................21
`
`B. LHC FALSIFIES OASIS ASSESSMENTS TO INCREASE
`REIMBURSEMENT AND IMPROVE RATINGS ..............................................24
`
`1. LHC Managers Directed Clinicians to Change OASIS answers .....................24
`2. LHC Installed Software to Make the Fraud Easier to Employ ........................25
`3. Clinicians Had No Discretion to Reject the Changes ......................................27
`4. When Clinicians Did Not Accept the Changes, LHC Managers Simply
`Overrode Those Decisions ...............................................................................29
`5. LHC Used Overrides to Falsely Inflate Quality Metrics .................................30
`
`
`
`Case 3:17-cv-00096-CLC-DCP Document 40 Filed 08/17/20 Page 2 of 73 PageID #: 184
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`ii
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`6. LHC Knew that the Overrides Were Being Inappropriately Used ..................36
`
`C. LHC MANIPULATES THE NUMBER OF THERAPY AND NURSING
`VISITS PER EPISODE IN ORDER TO INCREASE PROFITS ..........................38
`
`1. LHC Used the SVP Software and Clinical Programs to Manipulate
`Visits and Increase its Profits ...........................................................................40
`a. SVP’s “Episodic Tool” Specifically Targeted Medicare
`Beneficiaries ........................................................................................42
`b. LHC Directed its Personnel to Modify Plans of Care to
`Adhere to “Ceiling” and “Available” Points Limitations ....................43
`2. LHC Manipulated Therapy Visits/Plans of Care to Avoid LUPAs .................46
`3. LHC’s Additional Manipulation of Therapy Buckets, Including
`Numbers of Visits ............................................................................................47
`
`D. LHC KNOWINGLY CAUSES FALSE CLAIMS TO BE SUBMITTED ............51
`
`1. LHC’s Knowing Conduct ................................................................................51
`2. LHC’s Conduct Caused Claims to Federal Healthcare Programs ...................54
`
`E. LHC RETALIATED AGAINST MARSHALL FOR LAWFULLY
`RAISING CONCERNS ABOUT FRAUDULENT CONDUCT ..........................62
`
`VIII. CLAIMS FOR RELIEF ............................................................................................65
`
`COUNT I: Violations of the Federal False Claims Act Against
`Defendant LHC 31 U.S.C. § 3729(a)(1)(A)-(B), (G) ............................................66
`
`COUNT II: Violations of the Federal False Claims Act’s Anti-Retaliation
`Provision by Defendants LHC and UTMC HCS 31 U.S.C. § 3730(H).................68
`
`
`PRAYER FOR RELIEF ................................................................................................................69
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`Case 3:17-cv-00096-CLC-DCP Document 40 Filed 08/17/20 Page 3 of 73 PageID #: 185
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`iii
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`

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`I.
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`INTRODUCTION
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`-2-
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`-3-
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`-4-
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`IV. RULE 9(b), FED. R. CIV. P., ALLEGATIONS
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`-5-
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`reviewed by VIB partners reflected whether claims submitted on behalf of Medicare patients are
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`paid over time. The personal knowledge of each partner in VIB is imputed to the partnership
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`VIB.
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`V.
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`
`RELEVANT LEGAL AND REGULATORY BACKGROUND
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`A.
`
`THE FALSE CLAIMS ACT
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`-6-
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`

`

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`efforts in furtherance of an action under the statute or efforts to stop one or more violations of the
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`FCA. A person retaliated against in violation of this section is entitled to reinstatement, double
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`the amount of lost back pay, interest on the back pay, and special damages, including attorney
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`fees and litigation costs. Id.
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`B.
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`THE MEDICARE PROGRAM
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`-7-
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`Medicare Benefit Policy Manual, ch. 7, § 60.1. Part B finances the balance of the home health
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`spell of illness in excess of the 100 visits covered by Part A.
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`-8-
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`A. OASIS ASSESSMENTS DETERMINE THE AMOUNT CMS PAYS FOR
`HOME HEALTH SERVICES.
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`-9-
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`the skilled professional. In addition, the State survey process for HHAs may include
`review of OASIS data collected versus data encoded and transmitted to the CMS.
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`Id., Appx. B.
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`-10-
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`1.
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`Medicare Home Health PPS Billing & Payment Methodology
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`-11-
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`and resource use of each beneficiary.4 Thus, home health services provided to sicker
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`beneficiaries are reimbursed at higher rates because those individuals require more care.
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`-12-
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`Medicare patient eligibility, plan of care, and comprehensive assessment remains valid for 60-
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`day episodes of care, but payments for Medicare home health services are made based upon 30-
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`day payment periods. The national, standardized 30-day Medicare payment amount will be
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`$1,864.03, resulting in a 1.3% increase in payments. The rule implements the 1.5% Medicare
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`home health payment update mandated by the Bipartisan Budget Act of 2018, offset by a 0.2%
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`decrease due to the rural add-on. The final rule also adjusts PDGM case-mix weights, which
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`implements the removal of therapy thresholds for payments.
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`
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`-13-
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`or negligible care, that is, to discourage HHAs from providing a minimal number of visits in an
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`episode”). In a LUPA, instead of payment being based on the Rate, it is instead made for
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`individual services provided. Payment subject to a LUPA is thus a fraction of the normal
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`episodic payment.
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`-14-
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`bathing, ambulation); and the service utilization dimension (i.e., the number of skilled therapy
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`visits provided). Clinicians enter the answers to these questions as “M-codes.”
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`-15-
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`in a spell of illness and receives 14 or more therapy visits. 83 F.R. 56406, 56416. By way of
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`further example, a score of “1,” “2,” or “3” on M1860—indicating low-to-moderate difficulty
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`walking—results in an increase of seven severity points in the Functional dimension, if the
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`beneficiary is in the first or second episode and receives between zero and 13 therapy visits. Id.
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`Or, a score of 2 or more on M1830—indicating at least an inability to bathe without intermittent
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`assistance—increases the Function score by six severity points, if the beneficiary is in the first or
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`second episode and receives between zero and 13 therapy visits. Id. As is evidenced by these
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`examples, the severity points are tallied for each patient and establish the severity level of the
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`Clinical and Functional dimensions of the HHRG. Id. at 76709.
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`-16-
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`-17-
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`condition material to the Government’s decision to reimburse for the submitted claim for
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`services.
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`B. MEDICARE PAYS ONLY FOR MEDICALLY NECESSARY SERVICES.
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`-18-
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`[n]o payment shall be made to any provider of services or other person under this
`part unless there has been furnished such information as may be necessary in order
`to determine the amounts due such provider or other person under this part for the
`period with respect to which the amounts are being paid or for any prior period.
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`Accord, Medicare Benefits Policy Manual, ch. 7, § 20.1.2.
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`-19-
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`nstruments/HomeHealthQualityInits/HHQIQualityMeasures.html. Each measure is determined
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`from M-codes in OASIS datasets submitted by each HHA to state agencies. CMS, Home Health
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`Quality Measures – Outcomes, available at https://www.cms.gov/Medicare/Quality-Initiatives-
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`Patient-Assessment-
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`Instruments/HomeHealthQualityInits/Downloads/Home_Health_Outcomes_Measures_Table_O
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`ASIS_C2_02_03_17_Final.pdf.
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`-20-
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`VII. FACTS
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`-21-
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`-22-
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`for Medicare beneficiaries (referred to as “Medicare admit goals”) based on prior year
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`admissions.
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`-23-
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`-24-
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`goals. For example, LHC directed it managers to run “OAIS Answer Change Trending Reports”
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`on a regular basis to monitor the changes they implemented in the OASIS data.
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`-25-
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`-26-
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`changes that did not affect reimbursement, upon information and belief, the alerts never
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`identified changes that would decrease reimbursement or quality scores.
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`-27-
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`-28-
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`-29-
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`-30-
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`the company. LHC knew that it was inappropriate to use the override feature simply because
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`clinicians were pushing back on accepting their managers’ OASIS changes. LHC also knew that
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`the override feature was being used inappropriately, for these very reasons.
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`-31-
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`including through manipulation of M-codes, to accomplish these results. LHC also knew that
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`these practices resulted from revenue-generating policies set by its highest-level executives, and
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`specifically who specifically targeted the Medicare market in an effort to increase the company’s
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`profitability.
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`-32-
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`always doing what is right, by following our policies and procedures, and never wavering to real
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`or perceived pressure to cross any line… Period!” A compliance newsletter issued that same
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`month stated that “the use of an override to either accept or decline the recommendations made
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`by either the coder or the Team Leader would violate the OASIS One Clinician Rule.”
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`-33-
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`-34-
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`overrides performed in just LHC’s Beltway Division; nearly 7,500 of these overrides related to
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`functional ability codes that impact reimbursement. Moreover, functional ability overrides
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`affected approximately 2,750 unique Medicare patients at either their start-of-care, resumption-
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`of-care, or discharge.
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`-35-
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`6.
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`LHC Also Used Overrides to Falsely Inflate Quality Metrics.
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`-36-
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`-37-
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`“very concerning” decrease in quality metrics. To address this, she told LHC’s Executive
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`Directors and Clinical Directors to dig into their SHP reports and figure out what was driving the
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`decrease.”
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`-38-
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`-39-
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`-40-
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`established. Thus, no changes to decrease the patient’s dependency (and, in turn, increase the
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`HHRG score and reimbursement) could be made in order to allow for more reimbursed home
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`health visits.
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`-41-
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`a.
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`SVP’s “Episodic Tool” Specifically Targeted Medicare
`Beneficiaries.
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`-42-
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`-43-
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`(c)
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`instruction at weekly clinical case review meetings attended by local
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`managers and (at locations facing profitability issues) more senior
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`management; and
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`(d)
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`provision of one-on-one “counseling” and “training” to clinicians who
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`
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`consistently created unprofitable plans of care.
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`-44-
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`-45-
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`warned that Marshall “better be watching your SVP points,” so as not to cut into LHC’s profit
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`margin. Marshall was instructed to try in any way she could to decrease the number of home
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`health visits, so the points would become a positive or neutral balance.
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`-46-
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`-47-
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`HHRG as determined by OASIS data. She said that LHC needed to “make up revenue cuts” on
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`the order of 2% “somehow” and that “there’s no other way except therapy.”
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`-48-
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`-49-
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`-50-
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`grouping, LHC intends to manipulate the visits (either by moving them around and/or adding
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`more) so that it could still bill for a 60-day time period. Group 1, for example, described a
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`patient who had enough total visits to avoid LUPAs in both the first and second 30-day period,
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`but the visits were front-loaded in the first 30-day period. LHC’s “fix” would be to spread the
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`visits out so that there are enough visits in both the first and second 30-day period to avoid
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`LUPAs. Group 2 described a patient who did not have enough total visits to spread out and
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`avoid LUPAs in both the first and second 30-day period, so LHC’s “fix” would be to add visits
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`to second 30-day period. Groups 3 through 6 similarly described other episodic scenarios and
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`the actions that would allow LHC to still bill for a 60-day time period.
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`D.
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`LHC KNOWINGLY CAUSES FALSE CLAIMS TO BE SUBMITTED.
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`-51-
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`CONFIDENTIAL…” [P]lease call me instead.” On another occasion, Sylvester stated that LHC
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`“couldn’t have [the Government] seeing that we are changing visits based on financial data.”
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`-52-
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`Health Compare were unrealistically high. Sylvester confirmed that LHC’s home office was
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`aware of the massive number of overrides in every region. She instructed that no further action
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`or inquiry should be pursued regarding the overrides.
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`-53-
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`-54-
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`-55-
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`-56-
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`score from a “1” to a “2,” which the clinician accepted later that evening. Upon information and
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`belief, the change misrepresented the patient’s condition solely to inflate reimbursement from
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`CMS.
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`-57-
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`

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`avoided a situation where homebound status could be challenged, and allowed the patient to
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`show more improvement at discharge. Illustrating clinicians’ routine and widespread practice of
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`accepting managers’ changed OASIS answers, this clinician had accepted over 2,000 changes,
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`while declining just five, over the course of 2016.
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`-58-
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`had not identified any of these diagnoses, even as comorbidities. The clinician did not accept
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`any of these changes. All were accepted via override by the clinician’s manager ten days after
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`the assessment and, upon information and belief, without having visited the patient or consulted
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`the clinician. The changes are mapped in the table below.
`
`Diagnosis Original Short description
`inguinal hernia
`Primary K40.40
`16
`L89.152 sacral pressure ulcer  G20
` F03.90
`Z87.448 history of urinary
`disease
`Other 3 M62.81 atherosclerotic heart
`disease
`dysphagia
`difficulty walking
`
` Changed Short description
` I10
`essential (primary)
`hypertension
`Parkinson's disease
`dementia without
`behavioral disturbance
`COPD
`
` J44.9
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` M06.9
` Z93.1
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`rheumatoid arthritis
`gastrostomy status
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`Other 1
`Other 2
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`Other 4
`Other 5
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`R13.12
`R26.2
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`-59-
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`(bathing), a “1” in M1850 (transferring), and a “1” in M1860 (ambulation). The clinician’s
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`manager upcoded these scores to a “2” for M1830 (bathing), a “2” for M1850 (transferring), and
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`a “3” for M1860 (ambulation). This increased the Functional-severity points by six and three
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`points, respectively, which in turn increased the Functional-severity score from F1 to F3,
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`substantially increasing reimbursement.
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`-60-
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`(lower body dressing) to a “2,” the score of “2” in M1830 (bathing) to a “3,” and the score of “2”
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`in M1860 (ambulation) to a “3.” The clinician declined to accept each of these changes, but a
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`few days later, the clinician’s manager overrode the clinician’s objections and changed the codes
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`anyway. Upon information and belief, the manager did not consult the clinician and never met
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`the patient.
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`-61-
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`home health care. The nurses were seeing Patient LL just to fill the patient’s pill planner, which
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`Medicare does not consider a skilled need. Also, when nurses arrived at Patient LL’s house, they
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`were often told by a neighbor that Patient LL just got into a taxi to go to town, and many days
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`Patient LL would just ride the trolley around Pigeon Forge. The nurses would document that
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`Patient LL was not homebound, but LHC continued to keep the patient on service.
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`LHC RETALIATED AGAINST MARSHALL FOR LAWFULLY RAISING
`CONCERNS ABOUT FRAUDULENT CONDUCT
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`E.
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`-62-
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`on other occasions, too)—Marshall approached her Branch Managers, Libby Davis and Melanie
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`Gibson, to question these practices. In addition to Davis and Gibson, Marshall also complained
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`about these directives from LHC to her Performance Improvement Director, Sharon Coleman.
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`-63-
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`instruction to engage in the fraudulent conduct. Marshall needed her job to support her family, so
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`she complied with Coleman’s direction.
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`-64-
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`March 2016, Jennifer Knox, a LPN who worked for LHC, and another nurse from LHC’s
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`Maryville office called the company’s Corporate Integrity Line to report that the Maryville office
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`was keeping patients on service when there was no medical necessity to justify the need for
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`continued home health services. In response, corporate representatives called the Branch
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`Manager at the Maryville office and, as Relator understood, Knox was subject to a retaliatory
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`and hostile work environment that led to her constructive discharge.
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`-65-
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`knowingly and improperly avoid or decrease an obligation to pay or transmit money or property
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`to the Government. 31 U.S.C. § 3729(a)(1)(A)-(B), (G).
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`-66-
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`decision-making. As a result of these schemes, LHC routinely falsifies records to support the
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`eligibility of patients for the billed home health services.
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`-67-
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`-68-
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`Respectfully submitted,
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` s/ Jennifer M. Verkamp
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`Jennifer M. Verkamp (admitted pro hac vice)
`Frederick M. Morgan, Jr. (admitted pro hac vice)
`Sonya A. Rao (pro hac vice being submitted)
`Ian M. Doig (pro hac vice being submitted)
`MORGAN VERKAMP LLC
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` 35 East 7th Street, Suite 600
` Cincinnati, OH 45202
` Telephone: (513) 651-4400
` Fax: (513) 651-4405
` Email: jverkamp@morganverkamp.com
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`rmorgan@morganverkamp.com
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`sonya.rao@morganverkamp.com
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`idoig@morganverkamp.com
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`David A. Burkhalter, II, TN BPR #004771
`D. Alexander Burkhalter, III, TN BPR #033642
`Zachary J. Burkhalter, TN BPR #035956
`The Burkhalter Law Firm, P.C.
`111 S. Central Street
`Knoxville, TN 37902
`Telephone: (865) 524-4974
`Fax: (865) 524-0172
`Email: david@burkhalterlaw.com
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`alex@burkhalterlaw.com
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`zach@burkhalterlaw.com
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`Counsel for Relator
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true and accurate copy of the foregoing will be served via the
`Court’s electronic filing system and served on all counsel of record on this 17th day of August,
`2020.
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` s/ Jennifer M. Verkamp
`Jennifer M. Verkamp
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`Case 3:17-cv-00096-CLC-DCP Document 40 Filed 08/17/20 Page 73 of 73 PageID #: 255
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`-70-
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`