The Department of Justice announced that Vibra Healthcare LLC, a national hospital chain headquartered in Pennsylvania, has agreed to $32.7 million settlement to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services.

Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states. Its California facilities include Ballard Rehabilitation Hospital in San Bernardino, Kentfield Hospital in Marin County, Vibra Hospital of Sacramento, San Joaquin Valley Rehabilitation Hospital in Fresno, Vibra Hospital of Northern California in Redding, Vibra Hospital of San Diego and Kentfield Hospital of San Francisco.

LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care. IRFs are intended for patients needing rehabilitative services that require hospital-level care.

The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.

Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care. In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan. Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located. Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Daniel will receive at least $4 million.

This settlement illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Southern District of Texas in Houston and for the Western District of Kentucky; and the HHS-OIG. The qui tam case is captioned United States ex rel. Daniel v. Vibra Healthcare, LLC, Civil Action No. 10-5099 (S.D. Tex.).