Tapestry Hospice Settles $1.4 Million False Claims Act Allegations

Tapestry Hospice Settles .4 Million False Claims Act Allegations

Tapestry Hospice of Northwest Georgia, LLC, along with its owners and managers—David Lovell, MD, Stephanie Harbour, Ben Harbour, and Andrew Nall—has agreed to pay $1.4 million to resolve allegations of violating the False Claims Act. The allegations involved entering into kickback arrangements with medical directors to receive patient referrals.

U.S. Attorney Ryan K. Buchanan emphasized the importance of preventing financial motivations from influencing medical decisions. FBI Special Agent Keri Farley stated that the settlement serves as a deterrent against misuse of federal healthcare programs. Georgia Attorney General Chris Carr highlighted the need for trust in end-of-life care decisions.

The case originated from a whistleblower complaint by former Tapestry employee Kathy Erwin. The complaint alleged that Tapestry paid kickbacks to medical directors, including monthly stipends and signing bonuses, to induce patient referrals. These payments allegedly varied based on the number of referrals made.

The Government argued that these actions violated the Anti-Kickback Statute and resulted in the submission of false claims under the False Claims Act. The lawsuit, U.S. ex rel. Erwin v. Tapestry Hospice of Northwest Georgia, LLC, et al., No. 1:18-cv-4320-AT, was filed in the U.S. District Court for the Northern District of Georgia. Under the False Claims Act, private citizens can sue for false claims on behalf of the government and share in any recovery. Kathy Erwin received $252,000 from the settlement.

The case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the FBI, and the Georgia Medicaid Fraud Control Unit. The settlement was negotiated by Assistant U.S. Attorney Adam D. Nugent and Georgia Assistant Attorney General Rick Tangum. The claims resolved by the settlement are allegations only, with no determination of liability.

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