Brookdale faces fraud suit, charges of lax billing culture

Brentwood worker's 2012 complaint unsealed after U.S. says it won't intervene

The United States this week declined to intervene in a federal lawsuit against Brentwood-based Brookdale Senior Living filed by a former employee alleging Medicare fraud.

With the government removing itself from the Middle District of Tennessee case Tuesday, the court unsealed the original July 2012 complaint in which Brookdale utilization review nurse Marjorie Prather claimed the company has a culture of pushing claims through to the Centers for Medicare and Medicaid Services without accurately reviewing them. The case accuses Brookdale and various subsidiaries of violating the False Claims Act, the Federal Anti-Kickback Act and the Health Insurance Portability and Accountability Act.

"The UR nurses are only to do a 'quick review' and are not to look for any problems," reads the complaint. "Even though the UR nurses notice that reassessments, billing or coding have been done incorrectly, they are not to correct anything."

Additionally, Prather alleged among other things that the company changed dates on claims, approved them without ensuring proper compliance and billed visits in higher payment tiers.

"[Prather] has seen therapy reassessments done by therapists without actually seeing the patients," according to the suit, which is available here. "Therapy reassessments are not being done timely per Medicare regulations but are being 'recreated' when needed from visit notes."

Though the government has declined to pursue an investigation, Prather may continue to pursue the lawsuit. Richard Piliponis, her attorney, said a decision had not yet been made whether to move forward with the case. Attempts to reach a Brookdale spokesperson were unsuccessful.

The unsealed complaint follows word of Brookdale's $2.8 billion merger with senior living giant Emeritus Senior Living in February. Emeritus is currently under investigation by the Justice Department and U.S. Department of Health and Human Services for improper Medicaid billing. It is not the company's first fraud investigation; Emeritus settled charges in 2007 regarding false claims to the Texas Medicaid program.

Shares of Brookdale (Ticker: BKD) were down about 1 percent to $31.44 in Friday-afternoon trading. Year to date, they're up 16 percent.