Carter Healthcare and Its Top Officers Pay $7 Million To Settle Whistleblowers’ Claims of Medicare Fraud

Oklahoma Provider’s Florida Affiliate Overbilled for Home Care, Performed Therapy Regardless of Medical Need, Say U.S. Prosecutors

Government Rewards Two Therapists Who Blew the Whistle


WASHINGTON, D.C. (October 18, 2022) — Oklahoma City-based Carter Healthcare and two of its former top officers paid more than $7 million to settle two whistleblowers’ claims that an arm of the home-health provider defrauded Medicare by pushing therapy services for Florida seniors without regard to medical need.

The settlement was announced today by the U.S. Department of Justice in tandem with the $22.9 million settlement of a separate whistleblower case against Carter Healthcare that involved allegations of kickbacks at its operations in Oklahoma and Texas.

Carter Healthcare, a family-owned network of home-health and hospice-care providers, denied wrongdoing but agreed to sanctions and payments. The settlements include restitution that was paid personally by Stanley Carter, Carter Healthcare’s former CEO, and by Brad Carter, its former chief operating officer. The group’s Florida operation and its Oklahoma holding company both agreed to enter a monitoring program of the U.S. Department of Health and Human Services; Stanley and Brad Carter are barred from dealing with all federal healthcare programs for five years.

The company’s questionable Medicare billing was first reported to prosecutors by Sharon Mahaffey and Mark Brimer, two Florida-based therapists who will share almost $1.3 million as an award for their role in the case. Carter Healthcare also agreed to pay attorney fees for Ms. Mahaffey and Mr. Brimer, both of whom will continue to pursue claims that the company fired them illegally after they objected to its practices.

Ms. Mahaffey and Mr. Brimer are represented by The Employment Law Group® law firm. They raised their concerns about fraud and retaliation in a 2016 complaint filed against Carter Healthcare under the federal False Claims Act (FCA) in the U.S. District Court for the Southern District of Florida.

The FCA, originally signed into law by President Abraham Lincoln in 1863, makes it illegal to defraud the federal government. The law includes a “qui tam” provision that allows whistleblowers to file a complaint on behalf of the government and — if they prevail — to receive a portion of any resulting settlement or judgment.

The therapists’ 2016 lawsuit, along with a separate 2017 complaint filed by other whistleblowers in the U.S. District Court for the Western District of Oklahoma, remained secret for years while being investigated by the Justice Department. The Florida case finally became public on Monday, just before the settlement announcement; the Oklahoma case, in which The Employment Law Group is not involved, was unsealed in late September.

“Sharon and Mark spoke out loudly against Carter’s insistence on medically unnecessary treatments, including the pointless therapies they were ordered to provide on the U.S. taxpayer’s dime,” said Janel Quinn, a principal of The Employment Law Group who represents both whistleblowers. “Until today, the only reward they’ve gotten for their integrity was a pair of pink slips. This settlement offers them some real vindication — and soon they’ll bring Carter Healthcare before a jury to correct their wrongful dismissals, too.”

In their complaint, Ms. Mahaffey and Mr. Brimer — each of whom had more than three decades of therapy experience when they blew the whistle — described their resistance to a Carter Healthcare scheme that required 18 home visits per patient during each Medicare certification period, regardless of a patient’s need. Some patients were incapable of benefiting from such therapy, while others tried to refuse services but were ignored.

In one instance cited in the complaint, an elderly patient begged not to be treated on four separate occasions, and his wife also asked Ms. Mahaffey to discontinue the visits — yet Florida-based Carter officials ordered the occupational therapist to keep trying, and billed Medicare for the failed attempts at treatment.

In another instance from the complaint, Mr. Brimer asked to stop visiting a patient because she neither needed nor wanted further physical therapy. Instead, Carter officials dispatched a nurse to change the patient’s mind, relenting only when the patient said she’d report the company for fraud if it sent Mr. Brimer to her house again.

Both therapists were hired by Carter’s Florida affiliate in 2014; both were terminated in 2016 after they objected repeatedly to the company’s practices.

Ms. Quinn represents Ms. Mahaffey and Mr. Brimer along with R. Scott Oswald, TELG’s managing principal, and Lydia Pappas, a TELG associate. They worked closely on the case with Assistant U.S. Attorney James Weinkle of the U.S. Attorney’s Office for the Southern District of Florida; Assistant U.S. Attorney John Spaccarotella, now at the U.S. Attorney’s Office for the Eastern District of Michigan; and Michael Podberesky and Greg Mason, former and current trial attorneys, respectively, in the Justice Department’s Civil Fraud Section in D.C.


Case Information

United States ex rel. Mahaffey v. Carter Healthcare
No. 9:16-cv-80459
U.S. District Court for the Southern District of Florida
Original complaint filed on March 24, 2016
Third amended complaint filed on October 17, 2022 (available here)

United States ex rel. Duffield v. CHC Holdings, LLC
No. 5:17-cv-00826
U.S. District Court for the Western District of Oklahoma
Original complaint filed on August 3, 2017
First amended complaint filed on September 28, 2020 (available here)

Note: The Employment Law Group was not involved in the Duffield case.


About The Employment Law Group

The Employment Law Group® law firm represents whistleblowers and other employees who stand up to wrongdoing in the workplace. Based in Washington, D.C., the firm takes cases nationwide.