Signature Settles $244M Fraud Whistleblower Lawsuit for Just $30M

Signature HealthCARE, one of the country’s largest healthcare facility operators, has agreed to pay $30 million to settle a False Claims Act lawsuit filed three years ago.

Signature Settles $244M Fraud Whistleblower Lawsuit for Just $30M

That seems like a hefty sum, until you realize the extent of the Medicaid fraud its staff allegedly committed—which amounts to $244 million, according to the U.S. Justice Department. 

Regardless, it’s a good thing that Signature is being held accountable for its supposed fraud, which wouldn’t have happened without the work of two whistleblowers.

Signature, which is based in Louisville, operates nearly 120 facilities in 17 states, offering a variety of services including rehabilitation, long-term care and home health. This lawsuit concerned the Maury County nursing home, a Signature facility located on Trotwood Avenue in Columbia, Tennessee.

According to the lawsuit, Signature knowingly committed Medicaid fraud from January 2011 through September 2015. During that time, the facility’s administrators allegedly billed Medicaid Part A patients at the highest reimbursement rate, classifying these patients as Ultra High Resource Utilization Group (RUG) regardless of the level of care they required.

Then, nursing staff said they were directed to provide the bare minimum level of care to keep patients qualified for this category—no more, no less.

Attorneys said the facility’s strategy went far beyond the amount of care provided.

In Tennessee, Medicare and Medicaid patients who want to be admitted to a skilled nursing facility must get certification from a doctor.

The lawsuit claims that Signature created false certificates to admit more patients, even if they didn’t necessarily need skilled care. According to the lawsuit, Signature administrators even based their budgets on the assumption that the majority of their patients would be pulling in the highest reimbursement rate possible.

Whistleblowers Kristi Emerson, a therapy assistant, and LeeAnn Holt, an occupational therapist, began noticing odd behavior and unreasonable demands from Signature corporate in 2013. 

They were frequently told to provide care to patients who didn’t need or refused it, and they had to meet strict time requirements, like providing exactly 77 minutes of therapy or working with a patient for several hours in one day.

The two women began tracking their supervisors’ strange demands in September 2014, laying the groundwork for a Medicaid fraud lawsuit. In the records they kept, the women recalled:

  • In the incident that prompted Emerson and Holt to file the whistleblower lawsuit, their boss allegedly demanded that they provide four hours of therapy in one day to a patient who had been sick and was just recovering. When Holt pushed back, she said her boss told her that the patient needed the therapy to stay in his reimbursement bracket.  
  • On another occasion, Emerson was asked to provide 30 more minutes of therapy to a patient before the end of the day, even though she had already seen him. Emerson refused. Her supervisor responded by yelling, “’You can get the 30 minutes or find another place to work.’” As a result, Emerson was written up and had to participate in workplace counseling.
  • When Emerson later checked the same patient’s chart, she saw that her boss had added the 30 minutes of therapy Emerson refused to provide. When she asked her boss about it, she said she provided the therapy herself. 
  • Holt and Emerson were frequently directed to provide therapy for exact and unusual amounts of time, like 44 minutes. They believed this was a part of Signature’s plan to get patients into the Ultra High RUG category without providing more than a second of care necessary.

After gathering their notes and working with their lawyers, Holt and Emerson realized that these odd demands and incidents were probably related to a widespread Medicare fraud scheme, which generated an alleged $244 million for Signature in just four years. 

Signature has not admitted to any wrongdoing, but they agreed to settle the case for $30 million plus 2.4 percent interest. The money will be split between the federal government, TennCare (Tennessee’s Medicare - Medicaid system), Emerson and Holt. The whistleblowers stand to make $3 million each as a cash reward per the Medicaid whistleblower laws.

Despite the settlement, Signature’s legal woes are not over. Emerson and Holt have an active retaliation lawsuit against them, which they filed after they were fired for reporting their employer to the federal government—an unfortunate consequence for some whistleblowers and illegal conduct by their employers.

As for the facility where all this occurred, it’s still operating, but it’s no longer owned by Signature. The company sold the nursing home to Luxor Group, which rebranded the facility as Magnolia Healthcare.

All employees opted to stay in their jobs, including administrator Courtney White King. Luxor says that most current employees were not working for Signature during the time period in question in the lawsuit. However, according to her LinkedIn profile, King has been an administrator at Signature HealthCARE since April 2015, which overlaps with the fraud timeline asserted in the lawsuit by a year and a half.

We hope, however, that new ownership has helped this facility turn over a new leaf, and that $30 million is enough to get Signature to change its ways in all its facilities.

If you know of Medicare or Medicaid fraud happening in another Signature facility or any other nursing home, you can report it to the federal government. If you’re concerned about losing your job, know that a skilled employment retaliation attorney can help minimize any negative consequences and that you may be entitled to a multimillion-dollar payout. Report Online or Call Us 888.742.7248 to learn your rights.


Medicaid Fraud Hotline: 888.742.7248 or Report Online
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