Former employee William B. Caldwell was the director of operations at a Madison, Tennessee, nursing home owned and operated by Vanguard. Caldwell charges in the whistleblower lawsuit that Vanguard submitted false claims for patients on feeding tubes when they no longer qualified for Medicare coverage. He said the Medicare bills falsely claimed the patients had suffered a “new episode” of an illness that entitled them to additional benefits.

The Vanguard Healthcare whistleblower lawsuit also charges the company with billing Medicare and TennCare for medical equipment, such as poles and pumps, that were provided by suppliers at no cost. It also cited the specific practice of charging TennCare for a higher level of care and reimbursement than was justified.  

Caldwell says when he warned officials on a number of occasions that billing for equipment Vanguard had not paid for was “illegal and fraudulent,” he was fired.

“Vanguard terminated Caldwell in an effort to threaten, harass and discriminate against him,” the whistleblower lawsuit states, adding that Caldwell was “retaliated against and discharged by such defendants because of actions he took to uncover, expose and stop defendants’ illegal conduct.” 

The monetary terms of the whistleblower settlement have not been disclosed, but under "qui tam" provisions of the federal False Claims Act, whistleblowers can receive 15% to 30% of any recovered funds for their help in prosecuting fraudulent companies. 

The Vanguard Healthcare whistleblower settlement also requires Vanguard to sign a 36-page “corporate integrity agreement” with federal officials in which it agrees to develop and implement a compliance plan to educate employees and ensure future compliance with federal laws and regulations.