Tapestry Hospice settles $1.4 million kickback Case

Tapestry Hospice of Northwest Georgia, LLC, along with its owners and managers, recently agreed to pay $1.4 million to settle allegations of violating the False Claims Act through illegal kickback arrangements. This high-profile case highlights the severe consequences of violating federal laws and the importance of compliance in the healthcare industry.

This case not only underscores the federal government’s commitment to rooting out fraud in healthcare but also serves as a reminder of the legal complexities surrounding the False Claims Act. Businesses and professionals in the healthcare industry must understand the implications of such violations and how the Georgia healthcare fraud lawyers at Griffin Durham Tanner & Clarkson LLC provide crucial defense in these cases.

tapestry hospice

Allegations against Tapestry Hospice

The 2024 settlement resolves allegations that Tapestry Hospice and its management team—David Lovell, MD, Stephanie Harbour, Ben Harbour, and Andrew Nall—entered illegal financial arrangements with medical directors. According to the whistleblower complaint, Tapestry paid kickbacks to medical directors to induce them to refer hospice patients to their care. These alleged kickbacks included signing bonuses, monthly stipends, and compensation that fluctuated based on the volume of patient referrals.

The government contended that these arrangements violated the Anti-Kickback Statute, which prohibits healthcare providers from offering or accepting remuneration in exchange for patient referrals involving federally funded programs like Medicare or Medicaid. The alleged kickback schemes also led to the submission of false claims to federal healthcare programs, further violating the False Claims Act.

The legal framework: Anti-Kickback Statute and False Claims Act

The Tapestry Hospice case is a clear violation of two critical healthcare fraud statutes: the Anti-Kickback Statute (AKS) and the False Claims Act (FCA). Understanding these laws is crucial for healthcare providers to avoid similar pitfalls.

  • The Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) prohibits the exchange of anything of value to induce or reward patient referrals or the generation of business involving federal healthcare programs. Violations of the AKS can result in severe penalties, including criminal charges, civil fines, and exclusion from federal healthcare programs.
  • The False Claims Act (31 U.S.C. § 3729) allows the government to hold individuals and companies liable for knowingly submitting false claims to federal programs. In healthcare, this often involves submitting claims for services that were not medically necessary or were obtained through illegal referral schemes. The FCA also has qui tam provisions, allowing whistleblowers, or relators, to file lawsuits on behalf of the government and share in the settlement.

In the Tapestry case, the whistleblower, Kathy Erwin, alleged that Tapestry’s kickback scheme led to the submission of false claims for hospice services. As a result of her role in bringing the case to light, Erwin received $252,000 from the settlement under the FCA’s whistleblower provisions.

Consequences of healthcare kickback schemes

Kickback schemes in healthcare have far-reaching consequences that affect not only the providers involved but also the integrity of patient care and the healthcare system as a whole. When financial incentives drive medical decisions, the quality of care can be compromised, leading to unnecessary or inappropriate treatments. This undermines the trust patients place in their healthcare providers and can result in inflated healthcare costs.

In addition to the financial penalties, healthcare providers involved in kickback schemes face reputational damage, loss of licensure, and exclusion from participating in federal healthcare programs. Tapestry Hospice’s $1.4 million settlement not only resolves the civil claims against the organization but also serves as a warning to other providers about the serious risks associated with illegal referral practices.

How Griffin Durham Tanner & Clarkson LLC can defend against healthcare fraud allegations

Griffin Durham Tanner & Clarkson LLC has extensive experience in defending healthcare providers against complex fraud claims, including violations of the Anti-Kickback Statute, False Claims Act, and other healthcare laws. Our team is well-versed in navigating federal and Georgia statutes and has successfully represented clients in investigations by the DOJ, FBI, OIG, and state Medicaid Fraud Control Units.

We provide strategic, aggressive defense for clients facing allegations of:

Defending against whistleblower claims

Healthcare fraud cases involving whistleblower claims under the False Claims Act can lead to significant settlements. Our firm thoroughly investigates the facts, challenges evidence, and protects clients’ rights throughout the process, whether through negotiation or litigation.

We protect healthcare providers from fraud allegations

The Tapestry Hospice case demonstrates the far-reaching consequences of healthcare fraud and kickback violations. At Griffin Durham Tanner & Clarkson LLC, we are dedicated to defending healthcare providers against complex fraud allegations and helping them navigate the intricate regulatory landscape.

Whether you need defense against allegations of violating the Anti-Kickback Statute or the False Claims Act, or are looking to strengthen your compliance program, our team is here to help. Contact Griffin Durham Tanner & Clarkson LLC today at (404) 891-9150 to discuss how we can protect your business and reputation in the face of healthcare fraud allegations.