The Rise & Fall of a Home Health Care Company

United_States_Bankruptcy_Court_Seal.pngHealthEssentials was a Louisville, KY company providing nurse practitioner services to geriatric patients at assisted living facilities and nursing homes. The company, which started in 1998, grew quickly and at one point had operations in 18 states with revenues of over $53 million in 2003.
Then in 2005, lawsuits were initiated by former staffers from the Louisville, KY firm under whistleblower provisions of the False Claims Act which lead to criminal and civil investigations by the United States just as the company was planning an IPO. Three suits, initially filed under seal, accused HealthEssentials of systematically upcoding claims and billing for assisted living care for services actually provided in patients’ homes.
The company filed for bankruptcy protection in 2005 and entered a criminal plea to Health Care Fraud in 2008, also agreeing to pay $3.1 million of $40 million of claimed fraud. The officers of the company avoided criminal charges, however a business manager, Karen Stone was recently indicted for Health Care Fraud.
The original whistleblowers will not likely see any recovery under the False Claims Act as the company is largely insolvent and is not expected to be able to pay the $3.1 million settlement.
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