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NATIONAL HOME HEALTH CARE SERVICES FIRM

WASHINGTON, D.C. -- The Justice Department today announced that Tender Loving Care (TLC); its affiliate, Home Health Care, Inc.; and its predecessor company, Staff Builders, Inc.; has paid $1.4 million to settle allegations that the companies defrauded the Medicare program.

Tender Loving Care owns approximately a dozen subsidiaries, which provide home health care services nationwide through about 150 franchises. The franchises perform the home health care services and submit costs they incurred when owned by Staff Builders. The lawsuit, which was unsealed today, alleges among other things, that TLC's predecessor charged Medicare for various unallowable costs.

"Health care fraud schemes disguised as legitimate business arrangements divert millions of dollars away from patient care each year," said Assistant Attorney General David W. Ogden of the Civil Division. "The Department of Justice is committed to investigating Medicare fraud schemes, and ensure that ill-gotten gains are returned to the Medicare Trust Fund."

Jack Campo, who owned the Port St. Lucie, Florida, Staff Builders' franchise from 1990 until mid-1996, recently pled guilty to 6 felony offenses, including making false statements, in connection with fraudulent billings he submitted to Staff Builders for payment from Medicare.

The type of unallowable costs which were in Staff Builders' cost reports to Medicare include: kickbacks to medical doctors for referring of patients in need of home health care services; fictitious or excessive vehicle mileage claimed; inflated and false lease costs for equipment and office supplies; salaries and related expenses of relatives not providing home health care services; costs associated with a tackle and bait shop owned by Campo; and improper or excessive bonuses.

The civil settlement resolves allegations arising from a lawsuit filed under the qui tam provisions of the False Claims Act, a federal law that allows private individuals to sue on behalf of the government. The suit, filed in the Southern District of Florida in Miami by former Campo employee Sheila Pina and her husband, Robert G. Pina, Jr., who worked for a doctor alleged to have received kickbacks for patient referrals, also alleges that the TLC predecessor itself knew or should have known that such costs were unallowable when it submitted cost reports for reimbursement by Medicare.

In addition to paying $1.4 million, TLC also has agreed to adopt and apply a Corporate Integrity Agreement approved by the Department of Health and Human Services, which will seek to ensure that the Port St. Lucie franchise properly excludes all unallowable costs from submissions, and that TLC itself better monitors costs data from its franchises when submitting them to Medicare for payment.

Under the False Claims Act, a whistleblower can receive between 15 and 25 percent of the government's recovery in a case that the government joins. Under the agreement announced today, Mr. and Mrs. Pina, the relators in this matter, will receive $252,000.

The investigation was conducted by the United States Attorney's Office for the Southern District of Florida, the Criminal and Civil Divisions of the Department of Justice, the Federal Bureau of Investigation, and the Internal Revenue Service.

The lawsuit is filed as U.S. ex rel, Mr. and Mrs. Pina v. Staff Builders, Inc., et al., Civ. No. 96-86664

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