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TELG Helps Two Whistleblowers Win Settlement in Physical-Therapy Fraud Case


Posted on April 14, 2014
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Whistleblowers Kathya Angel and Alexis Natal will share 16 percent of a $2.8 million repayment to taxpayers, part of the U.S. government’s settlement of fraud claims brought against two local companies that operate a network of physical-therapy clinics, and individually against two owners and a former manager.

The Employment Law Group® law firm represented Ms. Angel and Ms. Natal in the case.  The women’s share of the settlement is their reward for filing the initial lawsuit that claimed the clinics had defrauded federal health-insurance programs.

The U.S. Department of Justice last week announced details of its deal with Alliance Rehabilitation LLC and Active Physical Therapy Services LLC, both incorporated in Maryland; and individually with Thomas Bray and Rajeev Gupta, owners and managers of both companies, and Geeta Trehan, who worked for Alliance and Active.

Alliance operates physical-therapy clinics in Washington and Northern Virginia, while Active operates clinics in Maryland. None of the defendants admitted any wrongdoing.

The defendants also reached a separate, confidential settlement with Ms. Angel and Ms. Natal, two former clinic employees who were fired after protesting the alleged fraud.

“Kathya and Alexis have shown immense courage and perseverance, and as a result U.S. taxpayers will recover millions of dollars,” said David L. Scher, a principal of The Employment Law Group and lead attorney on the case. “Both women could have looked the other way, but instead they did the right thing — and were fired. Their three-year campaign for justice, for themselves and for their fellow citizens, deserves recognition and honor.”

Ms. Angel and Ms. Natal, who worked for the defendants as a medical biller and medical assistant respectively, blew the whistle on their former employers in late 2010 by filing a complaint under the federal False Claims Act.  That statute, originally signed into law by President Abraham Lincoln in 1863, makes it illegal to deceive the federal government for financial gain.

The law includes a “qui tam” provision that allows whistleblowers to file a legal complaint on behalf of the government and — if they prevail — to receive a share of the proceeds.

Among other things, Ms. Angel and Ms. Natal alleged in their qui tam complaint that the defendants had billed Medicare for services supposedly performed by approved physical therapists — even though the therapy actually was conducted by staff members whose work was not reimbursable by the government program.

The Justice Department later decided to intervene in the case, endorsing some of the claims and taking charge of its own representation.  It concluded that Alliance and Active had been submitting improper bills to Medicare and Tricare, another government program, for more than five years starting in 2007.

The resulting settlement was negotiated by the U.S. Attorney for the District of Columbia, Ronald C. Machen Jr., in consultation with investigators and attorneys for Medicare and Tricare.  In addition to repaying the U.S. Treasury, the defendants signed a “Corporate Integrity Agreement” that will govern their future practices.

Medicare fraud doesn’t just harm taxpayers; it raises medical costs for everyone,” said Mr. Scher. “I’m proud to have helped our clients to blow the whistle here: Kathya and Alexis are great examples of the difference an honest person can make in the world.”

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