DOJ Brings False Claims Act Suit Against Serial LTC Whistleblower

Thomas Prose is the founder and owner of a Michigan-based “post-hospitalist” company named General Medicine P.C. (GM), which purports to specialize in the care of post-acute patients in long-term care facilities by providing skilled nursing facility (SNF) program services, among other things. Since at least 2016, Prose has also had another pastime: filing qui tam actions under the False Claims Act (FCA) against other long-term care companies. 

Late last month, however, the chickens appear to have come home to roost, as the government filed its own FCA case against Prose himself, as well as GM and numerous other entities Prose used to operate his business. The government’s complaint alleges that Prose conducted a long-running scheme to defraud Medicare through a host of fraudulent practices, including billing for unnecessary medical services, failing to provide services billed for, and submitting inflated bills for services provided. 

Prose’s history of filing FCA cases began as early as 2016 when he filed a qui tam suit in the Northern District of Texas alleging that a rehabilitation company had defrauded the government by paying kickbacks to skilled nursing facilities and participating in a sham program to disguise illegal cash payments to doctors. That case was settled in 2018 for an undisclosed sum. Prose continued blowing the whistle with two more FCA cases in 2017. First, in the Eastern District of Louisiana, Prose filed an FCA lawsuit claiming that a healthcare company providing nurse practitioners to perform evaluation and management service visits for patients admitted to long-term care facilities had paid illegal kickbacks — in the form of monthly per-patient fees — to physicians in order to incentivize them to refer patients to the defendant.   

Also in 2017, Prose filed an FCA case in the Northern District of Illinois against a managed care organization (MCO), Molina Healthcare, that had contracted to provide SNF services through so-called “SNFists” — medical professionals specializing in the care of individuals residing in nursing homes employed by or under contract with a MCO. Prose alleged that Molina defrauded the government by failing to provide the SNFist services as contracted. The district court initially dismissed the Molina case, but the case was reinstated late last year by the U.S. Court of Appeals for the Seventh Circuit and proceedings are ongoing.

All of this background gives the government’s nearly 100-page complaint against Prose a distinct “what goes around comes around” flavor. In the suit the government filed last month in the Southern District of Illinois, the allegations against Prose and GM are a virtual smorgasbord of alleged fraudulent conduct, including allegations similar to what Prose, as relator, alleged against the defendants in his multiple qui tam cases. According to the government’s complaint against Prose, beginning in at least 2013, Prose and his companies filed thousands of false claims to Medicare for services that were not necessary, were not performed as documented, or did not meet the requirements for the medical codes billed. The scheme allegedly resulted in as much as $40 million in fraud to the Medicare program.  

While the fraudulent conduct alleged against Prose and his companies is too extensive to fully recount in this brief article, some of the more colorful examples include:

• GM billed Medicare for more visits than could humanly be completed by a single practitioner. For example, GM and another entity used by Prose billed Medicare for 75 patient visits by a single practitioner over a two-day period. To perform these services as billed would have taken the practitioner 43 hours of the 48-hour period.

• GM regularly upcoded medical services — i.e., used improper medical billing codes that fraudulently misrepresented the services provided and the appropriate billing rate for those services — and specifically omitted billing codes with lower reimbursement rates from GM progress notes forms so clinicians did not have the option of choosing those codes.

• Prose directed that clinicians perform minimum numbers of patient visits. For example, under Prose’s direction, one GM director of clinical operations sent an email directing that 654 visits were required for the next week without any consideration of the patients’ medical conditions.

• After one practitioner reported performing 60 patient visits in one day — which Prose found could lead to scrutiny by regulators — Prose instituted a so-called “35-visit rule” under which GM could bill for as many, but not more than, 35 patient visits per day.

• GM paid its clinicians to perform as many patient visits as possible, resulting in one practitioner noting that the medical facilities serviced by GM were questioning why “there’s so many of us here each week???”

• The same practitioner complained to a colleague “I have a real problem with what we r doing here! We r doing these visits just for more $$ for gen med [GM] and this [is] not right or fair to our pts [patients] or our facilities!”

• Prose used numerous shell entities to disguise the high volume of billing it was performing and the unnecessary services it was providing.

The government’s complaint against Prose, although only unproven allegations at this point, suggests that the government already has substantial evidence — including internal communications between GM employees — to support its claims. While Prose’s Molina case is still ongoing, it seems Prose may be required to spend more of his time litigating FCA claims as a defendant — rather than as a whistleblower — and defending himself against allegations similar to those he has repeatedly made against others.