DOJ: Guardian Elder Care Holdings & related entities agree to pay $15.4M to resolve False Claims Act allegations for billing for 'medically unnecessary rehabilitation therapy services'

Staff Writer

JEFFERSON COUNTY — Guardian Elder Care Holdings Inc., and related companies Guardian LTC Management Inc., Guardian Elder Care Management Inc., Guardian Elder Care Management I Inc. and Guardian Rehabilitation Services Inc., (Guardian) agreed to pay $15,466,278 to resolve False Claims Act allegations that they knowingly overbilled Medicare and the Federal Employees Health Benefits Program for medically unnecessary rehabilitation therapy services, the Department of Justice announced in a release issued on Wednesday. Guardian operates more than 50 nursing facilities throughout Pennsylvania, as well as in Ohio and West Virginia.

“Seniors rely on the Medicare program to provide them with appropriate care, and to ensure that they are treated with dignity and respect,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The department will not tolerate nursing home operators that put their own economic gain ahead of the needs of their residents and will continue to hold accountable those operators who bill Medicare for unnecessary rehabilitation services.”

Among the more-than-60 locations listed on Guardian Elder Care’s website are Mulberry Healthcare & Rehabilitation Center in Punxsutawney, Highland View Healthcare & Rehabilitation Center in Brockway, Scenery Hill Healthcare & Rehabilitation Center in Indiana and Il Villaggio Independent Living in Brockway.

Through an email statement sent to The Spirit, Patricia McGillan, Guardian Elder Care Chief Compliance Officer, said, "Resident care remains our first priority, and we are committed to meeting our obligations under this agreement. We are confident that Guardian’s Corporate Compliance Program advocates for our patients, their families and caregivers."

The settlement announced Wednesday resolves claims by the United States that from Jan. 1, 2011, through Dec. 31, 2017, Guardian caused certain facilities in Pennsylvania, West Virginia and Ohio to bill for patients at the highest level of Medicare reimbursement, when services at that level were not medically necessary and were influenced by financial considerations rather than resident needs, the release said. These allegations were originally brought by two former Guardian employees, Phillipa Krause and Julie White, under the whistleblower, or qui tam, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to share in any recovery. The whistleblowers in this case will receive approximately $2.8 million.

The settlement also resolves allegations voluntarily disclosed by Guardian that it had employed two people who were excluded from federal healthcare programs, according to the release, which also noted that, "as a result of its employment of these two excluded individuals, Guardian inappropriately received payment for ineligible services.

Contemporaneous with the civil settlement, Guardian agreed to enter into a chain-wide Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General. Such agreements promote compliance and protect vulnerable nursing home residents.

The case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania and for the Western District of Pennsylvania; HHS-OIG; and OPM-OIG. This case was supported by the Department of Justice’s Elder Justice and Nursing Home Initiative, which coordinates the department’s activities combating elder abuse, neglect, and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs. This case was also a product of the Elder Justice Task Force of the U.S. Attorney’s Office for the Eastern District of Pennsylvania that launched four years ago. For more information about the Department’s Elder Justice Initiative and the Elder Justice Task Force, see

The case is docketed as United States ex rel. Krauss v. Guardian Elder Care Holdings, Inc., et al., Civil Action No. 3:15-cv-6850 (E.D. Pa.). The claims resolved by the settlement are allegations only; there has been no determination of liability.