Dialysis Centers Agree to Pay $2 Million to Resolve Allegations of Provider Relief Fund Fraud

BOSTON - SNG Bellaire Dialysis Center, LP; SNG Hillcroft Dialysis Center, LP; SNG Northwest Dialysis Center, LP; SNG Pasadena Dialysis Center, LP; SNG Sandcastle Dialysis Center, LP; and SNG Texas City Dialysis, LP (Collectively SNG Dialysis Centers) have agreed to pay approximately $2 million to resolve False Claims Act allegations that the companies submitted false claims to the U.S. Department for Health and Human Services (HHS) to receive payments from the Provider Relief Fund (PRF). Sankar Nephrology Group (SNG), which is the majority owner of the Defendant SNG Dialysis Centers, will provide a guaranty backing the settlement amount.

Congress enacted the Coronavirus Aid, Relief, and the Economic Security Act on March 29, 2020, to provide emergency financial assistance to the millions of Americans who were suffering the economic effects of the COVID-19 pandemic. Among other things, the CARES Act created the PRF, which reimbursed eligible health care providers for lost revenue or increased expenses that the COVID-19 pandemic caused. The Health Resources and Services Administration (HRSA), an agency within HHS, managed the PRF. HRSA distributed funds directly to health care providers based on their past Medicare billing, subject to certain conditions, including that health care providers report their lost revenue and increased expenses caused by the COVID-19 pandemic.

As detailed in the settlement agreement, the dialysis centers misrepresented their lost revenue and received more PRF funding than they were entitled to obtain. Specifically, the SNG Dialysis Centers admit that, by the time they reported their lost revenue and increased expenses to HRSA, each dialysis center had either ceased operating or sold its operations to another owner. In their reports to HRSA, however, the SNG Dialysis Centers stated that they had zero revenue during the reporting period. This created the false implication that their revenue had gone to zero because of the pandemic, rather than a pre-arranged sale or closure. This reporting led HRSA to award PRF funding to the dialysis centers beyond their entitlement. The United States contends that, as a result of this conduct, the SNG Dialysis Centers submitted to HRSA false claims for payment and false statements material to a false claim.

United States Attorney Leah B. Foley and Roberto Coviello, Special Agent in Charge, Health and Human Services-Office of Inspector General made the announcement today. Assistant U.S. Attorney Charles B. Weinograd of the Affirmative Civil Enforcement Unit handled the case.