Tapestry Hospice Settles Healthcare Kickback Claims for $1.4 Million

Tapestry Hospice of Northwest Georgia, LLC, and its owners and managers, David Lovell, MD, Stephanie Harbour, Ben Harbour, and Andrew Nall (collectively “Tapestry”), agreed to pay $1.4 million to resolve allegations that they violated the False Claims Act by entering into kickback arrangements with medical directors in exchange for referrals of hospice patients to Tapestry.

“By entering into kickback arrangements, health care providers can cause doctors to make medical decisions that are motivated by financial gain, rather than the patient’s best interest,” said U.S. Attorney Ryan K. Buchanan. “Our office is committed to ensuring the accountability of health care providers who put their own financial needs ahead of their patients.”

“The False Claims Act settlement in this case will hopefully be a deterrent to those who selfishly evade our federal healthcare programs for their own benefit,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The message is clear, the FBI will not tolerate companies operating corporate-wide schemes to illegally line their pockets.”

“Decisions regarding end-of-life care are incredibly difficult and personal, and families must be able to trust the intentions of their chosen providers,” said Georgia Attorney General Chris Carr. “Those who instead take advantage of the system for their own personal gain will be held accountable.”

This case began when a former employee of Tapestry filed a whistleblower complaint alleging that Tapestry paid kickbacks to medical directors to induce them to refer patients to Tapestry.  These alleged kickbacks included monthly stipends and a signing bonus paid to the medical directors.  The compensation allegedly increased when the medical director referred more patients and decreased when the medical director failed to make referrals.

The Government alleges that these arrangements violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and caused the submission of false claims in violation of the False Claims Act, 31 U.S.C. § 3729, et seq.

This civil settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia by Kathy Erwin (the Relator) under the qui tam or whistleblower provisions of the False Claims Act, U.S. ex rel. Erwin v. Tapestry Hospice of Northwest Georgia, LLC, et al., No. 1:18-cv-4320-AT.  Under the False Claims Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government.  The Relator has received $252,000 from the settlement.

This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia the Federal Bureau of Investigation and the Georgia Medicaid Fraud Control Unit.

The civil settlement was reached by Assistant U.S. Attorney Adam D. Nugent and Georgia Assistant Attorney General Rick Tangum. The claims resolved by the settlement are allegations only, and there has been no determination of liability.