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St. Louis attorney sued in fraud case from Tennessee

Angela Riley//May 20, 2009

St. Louis attorney sued in fraud case from Tennessee

Angela Riley//May 20, 2009

The U.S. Attorney’s Office in Nashville, Tenn., has filed a civil lawsuit against a St. Louis attorney alleging he and a business partner defrauded Medicare of more than $6 million.

The suit filed on Monday in U.S. District Court for the Middle District of Tennessee alleges that attorney Robert B. Vining Jr. served as the “sham” owner of three home health care agencies.

Vining declined to comment on the allegations in the suit. He currently is actively practicing law and is listed in good standing with The Missouri Bar.

Also named in the suit was James W. Carell, a philanthropist from Nashville.

According to the petition, Carell and Vining have been friends since at least the 1980s. During the 1990s through late 2002, Vining owned VIP Home Nursing and Rehabilitation Services, Professional Home Health Care and University Home Health, all located in Tennessee. Diversified Health Management, of which Carell was the president, was the management company for the three agencies.

The petition alleges that Vining served as the “sham” owner of the agencies while Carell and his company served as the management company. This arrangement allowed for them to evade Medicare rules that limited a home health agency’s owner’s compensation but placed no limits on fees of a management company.

Carell supposedly had full control of all three agencies. Vining only visited the companies quarterly and continued to practice law in St. Louis, the petition said.

Medicare would not have reimbursed them if it had known of the related-party relationship between the companies.

Carell’s attorney, William Ramsey, of Neal & Harwell in Nashville, said the issues raised by the U.S. attorney have already been resolved by an appeals court. A challenge previously made regarding fees paid by Medicare to Maximum Home Health Care, now known as VIP, went to the 6th U.S. Circuit Court of Appeals. The appeals court declared that the reimbursement fees were fair under Medicare guidelines, Ramsey said.

Ramsey also said the lawsuit was also barred by the statute of limitations, since the U.S. attorney’s office has been pursuing actions since 1995.

Once Medicare changed its reimbursement rules in 2000, it was no longer advantageous for the home health agencies to bill Medicare for management company services, according to a release from U.S. Attorney Edward M. Yarbrough’s office. Vining sold the companies to Carell for $500,000 with the agreement to pay Vining $100,000 as a consultant for 10 years. The price was well below fair market value at the time, the petition said.

In total, the U.S. attorney’s office alleges, Medicare paid the companies approximately $6.2 million more than they were entitled to receive. The office is asking the court for treble damages under the False Claims Act, plus civil penalties ranging from $5,500 to $11,000 for each violation. 

The case is U.S. v. James W. Carell, Robert Vining, et al., 3:09-cv-445.

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