Hill-Rom Company, Inc. Will Pay $41.8 Million to Resolve Federal Health Care Fraud Investigation

KNOXVILLE, TN—Hill-Rom Company, Inc., one of the largest national suppliers of durable medical equipment, has agreed to pay $41.8 million to settle alleged violations of the federal False Claims Act and other federal laws and regulations. This is the largest civil fraud recovery ever by the U.S. Attorney’s Office for the Eastern District of Tennessee.

The United States’ investigation revealed that for a number of years Hill-Rom knowingly submitted numerous and repeated false claims to the Medicare program for certain specialized medical equipment—bed support surfaces for treatment of pressure ulcers or bed sores—for patients who did not qualify for this equipment. Hill-Rom submitted these false claims for patients for whom the equipment was not medically necessary, including claims for patients who had died or were no longer using the equipment. Hill-Rom had a practice of automatically billing for patients over long periods of time without making any reasonable effort to determine if the patients for whom it submitted the claims continued to meet Medicare conditions for payment. At the time it submitted these false claims, Hill-Rom was well aware of the Medicare laws and rules regarding coverage and claims for this equipment and its ongoing obligation to reasonably follow the condition of its patients.

The federal False Claims Act is intended to provide a means for the United States to recover moneys paid by federal programs to persons and companies who have knowingly sought and received funds to which they were not entitled. The payment Hill-Rom must now make in connection with this settlement is to compensate the Medicare trust fund for the moneys paid out of that fund which Hill-Rom improperly claimed and received during the period from 1999 through 2007. As part of this overall settlement, Hill-Rom has also entered into a comprehensive five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) to ensure its future compliance with federal health care benefit program requirements.

“Today’s settlement is an example of the determination of both the Justice Department and the Department of Health and Human Services to enforce the federal False Claims Act and to protect the Medicare trust funds to ensure that the Medicare program remains viable to provide health care for today’s seniors and disabled citizens as well as for the next generation,” said U.S. Attorney Bill Killian.

“Too many giant corporations make business decisions believing that they are immune from charges of Medicare fraud,” said Derrick Jackson, Special Agent in Charge of the federal Health and Human Services Department, Office of Inspector General’s region covering Tennessee. “This settlement puts companies on notice that, no matter their size, violating Medicare regulations will lead to investigation and prosecution.”

U.S. Attorney Killian further noted that this settlement resolves a comprehensive investigation into Hill-Rom’s Medicare billing practices which began as a result of allegations brought by two Hill-Rom former and current employees. Laurie Salmons and Lisa Brocco, both trained nurses who served as sales representatives for Hill-Rom, through their attorney David Burkhalter, filed an action on behalf of the United States under the qui tam, commonly-known as whistle-blower, provisions of the federal False Claims Act. Under the terms of the settlement agreement and as authorized by the False Claims Act, Salmons and Brocco are to receive jointly over $8 million from the proceeds of the settlement for their role in filing the qui tam complaint and actively assisting with the investigation.

The investigative team whose diligent efforts resulted in this settlement was comprised of representatives from the HHS-OIG, Federal Bureau of Investigation (FBI), Railroad Retirement Board Office of Inspector General (RRB-OIG), U.S. Attorney’s Offices for the Eastern District of Tennessee (USAO-TNE) and the District of South Carolina (USAO-SC), and U.S. Department of Justice (DOJ). Assistant U.S. Attorneys (AUSAs) Betsy Tonkin, Rob McConkey and Will Mackie represented the United States.

U.S. Attorney Killian commended the dedication and diligence of all who played a role in this complex investigation, in particular lead HHS-OIG Special Agent Tony Maffei, FBI Forensic Accountant/Certified Fraud Examiner LeAnn Lanz, RRB-OIG Special Agent Tom Tamburello, USAO-TNE paralegal Susan Page, USAO-TNE contract paralegal Renee Lange, and AUSAs Betsy Tonkin, Rob McConkey and Will Mackie for their oversight of the parallel civil and criminal investigation for the U.S. Attorney’s Office. U.S. Attorney Killian also recognized the assistance of AUSAs Jennifer Aldrich and Fran Trapp from the USAO-SC, HHS-OIG Senior Counsel Tonya Keusseyan, and DOJ Trial Counsel Tom Morris.