Elias Whistleblower Reaches $1 Million Settlement With Mercy Health for Medicare/Medicaid Fraud and Wrongful Termination

March 22, 2022

Healthcare conglomerate Mercy Health agreed today to pay $1,000,050 to settle a qui tam and wrongful termination suit brought by an Elias LLC client on behalf of herself and the United States, alleging that Mercy improperly billed Medicare and Medicaid for home health services and wrongfully fired her for reporting and objecting to it.

The lawsuit alleged that a home health agency owned and operated by Mercy certified and re-certified patients for home health services that were not in fact in need of such services. Mercy did so to increase its patient enrollment and maximize government payments for its services. Many of these improperly enrolled patients had been enrolled for home health services for longer than a year – some for multiple years – requiring Mercy to periodically re-certify that the patients remained in need of home health services. These multiple recertifications, however, raised red flags with the administrators of government plans, which often resulted in nonpayment for the services. To evade this obstacle, Mercy routinely discharged their patients without notice, certifying that the patients had achieved the goals of their care plan, had achieved substantial to full independence, and were no longer in need of home aid. But Mercy would then readmit the patients within days, certifying that they were substantially or completely dependent on home aid for daily functions, such as getting out of bed, walking, and bathing – the very functions that Mercy had certified that patients were capable of doing themselves just days earlier.

The whistleblower – Margie Nieto – worked for the Mercy home health agency at issue and was in charge of handling claim authorizations. She discovered the misconduct above, reported it to her superiors, and objected to it. In response, she was harassed, demoted, and eventually fired.

The United States did not intervene, and Ms. Nieto was forced to pursue this case on her own through Elias LLC. Per the terms of the settlement agreement, $700,050 of the settlement proceeds will be paid to the United States to settle the claims of Medicare and Medicaid fraud against the government. Ms. Nieto will be awarded 26 percent of that amount ($182,013). The remainder of the settlement – $300,000 – is going directly to Ms. Nieto to settle her claims for wrongful termination and attorneys’ fees and costs.

Read the settlement agreement here.