A home-care agency the U.S. Justice Department sued on Aug. 29 for allegedly overbilling Medicare at least $30 million is now owned by Columbia/HCA Healthcare Corp., whose own home-care operations are the subject of a massive federal fraud investigation.
Columbia didn't own the home-care agency when the alleged overbilling took place. The Nashville-based healthcare company's connection to the agency wasn't disclosed by the Justice Department.
The government said the owner of Chattanooga, Tenn.-based Alpha Medical and the former executive director of Superior Home Health Care of Chattanooga, now called Columbia HomeCare, conspired to obtain some $30 million in improper Medicare reimbursement from 1990 to 1993 for management fees paid to Alpha by Superior.
The federal suit filed in U.S. District Court in Chattanooga names Alpha owner William T. Rogers, his wife Gayle M. Rogers, and James C. Callaway, former director of Superior, as defendants.
Columbia Parkridge Medical Center in Chattanooga purchased Superior in 1995. The purchase gave Columbia control of the area's largest home-care agency and the ability to serve patients in 15 surrounding counties, said local press reports.
Parkridge Chief Executive Officer Christopher W. Dux said his hospital bought Superior after the alleged improprieties. "We're not named in the lawsuit and have not seen it," he said.
The suit claims Alpha and Superior were not entitled to Medicare reimbursement for the billed management fees because the companies are related organizations and are eligible only for reimbursement up to the amount of reasonable costs for patient care.
The complaint maintains that Alpha and Superior were related because William T. Rogers was the president of Superior's board and held other executive positions when Alpha initially contracted with Superior in 1986. The suit further claims that additional ties existed between Rogers' family and close friends and the two firms.
Alpha said the government's action is "unjustified" and the disputed charges have been previously examined by the government and found to be proper.