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Former Corporate CEO & CFO Held Personally Liable for False Claims


Posted on Mar 11, 2014

FORMER HEALTHCARE CEO & CFO HELD PERSONALLY LIABLE FOR FALSE CLAIMS

HealthEssential Solutions Inc.’s former Chief Executive Officer, President and Board Chairman Michael R. Barr and former Chief Financial Officer Norman J. Pfaadt are reported to have agreed to pay $1 Million and $20,000.00, respectively, to resolve claims that they allegedly and knowingly caused the company to submit false claims to Medicare during the period between 1994 and 2004.

HeathEssentials was a healthcare provider that rendered primary care services to assisted living, nursing facilities, and other patients until the company filed for bankruptcy in 2005.

Recently, the government has stepped up efforts to hold companies and their executive officers accountable for repayment for the filing false or inflated claims. In this case, the former CEO and CFO were alleged to have inflated their companies charges for services that were not considered medically necessary which placed a burden upon US taxpayers.

When the insurer is a government entity such as Medicare, the False Claims Act provides a mechanism for holding those individuals and companies responsible for filing false or inflated claims. As a result of this settlement, the former CEO will be excluded from participating in any federally funded health care programs for a period of no less than 3 years.

Former HealthEssential employees filed a lawsuit under the qui tam or whistleblower provisions of the False Claims act which allows private citizens who have knowledge of an entity filing false claims to file suit on behalf of the government and share in the recovery.

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