Law360 Spotlights Robbins Umeda LLP’s* Derivative Suit Involving Hospice Service Amedisys Inc.

On July 6, 2010, Law360 reported that shareholders of hospice service Amedisys Inc., represented by Robbins Umeda LLP, The Lemmon Law Firm, LLC, and Leopold Kuvin, P.A., have filed a derivative suit in the U.S. District Court for the Middle District of Louisiana, alleging that executives gamed the Medicare system by instructing workers to visit dying patients more often than necessary and violating the False Claims Act.

The suit stems from media reports in April indicating a companywide practice of giving patients as many visits as required to earn additional Medicare payments.  Between 2005 and 2007, the Centers for Medicare & Medicaid Services (CMS) paid an extra $2,200 for any patient visited ten times, spurring Amedisys to visit 9.5% of its patients on that many occasions, according to the suit.  When CMS changed the payment structure in 2008 to increase payments at the six, fourteen, and twenty visit marks, the number of Amedisys patients receiving six, fourteen, and twenty visits jumped 8%, 33%, and 41% respectively, the plaintiffs allege.

This isn’t the first time executives have gotten the company into trouble.  In 2003, Amedisys paid the U.S. Department of Justice $1.16 million for violating the False Claims Act between 1994 and 1999, when it was accused of billing for Medicare services that were never rendered.

The case is Himmel v. Borne, et al., case number 10-cv-00441, in the U.S. District Court for the Middle District of Louisiana, and it seeks restitution, disgorgement, and the implementation of strong corporate governance practices to help the company avoid exposure to future False Claims Act violations.

* The firm name changed from Robbins Umeda LLP to Robbins LLP on January 1, 2013.

Having information at your fingertips is easier than ever. Enroll in Robbins LLP’s free investment monitoring service, Stock Watch, for notifications of corporate misconduct impacting the value of your investments, advice on how to hold corporate officers and directors accountable for their misconduct, and to receive information about class action settlements.