Hohenwald, Tennessee — A Middle Tennessee health company has agreed to pay more than $2 million to the federal government and the state to settle allegations that one of its nursing homes spent five years billing Medicare and Medicaid while delivering care so deficient it barely qualified as care at all.
The U.S. Attorney’s Office for the Middle District of Tennessee announced Monday that American Health Companies — doing business as American Health Partners — will pay $2,090,309 to resolve False Claims Act liability tied to Lewis County Nursing and Rehabilitation, a 131-bed facility in Hohenwald that operated as AHC Lewis County between 2019 and 2024.
According to federal allegations, the facility provided what investigators described as “grossly substandard and worthless nursing home services.” Residents went without proper wound care. Infection control failures went unaddressed. Falls weren’t being prevented. Basic weight-loss protocols weren’t followed.
The facility didn’t quietly correct course — it billed Medicare and TennCare throughout the period, collecting taxpayer-funded reimbursements while conditions inside allegedly deteriorated. In 2023, state regulators stepped in and suspended new admissions due to conditions deemed “harmful or likely to be harmful” to residents.
What the prosecution called a clear message
U.S. Attorney Braden H. Boucek didn’t soften his language in announcing the settlement.
“This settlement is essential to protecting the elderly and disabled residents of our community who depend on quality care,” Boucek said. “But it is equally essential to protect the taxpayers who fund these programs. When facilities inflate charges while cutting corners on care, they undermine both quality for the people they serve and the public trust. Strong enforcement sends a clear message that exploiting seniors and the American taxpayer will have real consequences.”
The case is part of a broader federal push to hold nursing homes accountable when billing and quality diverge — a pattern that the Department of Justice has increasingly targeted in recent years. Just this week, the DOJ announced what officials called the largest healthcare fraud crackdown in U.S. history, naming nursing homes among the providers under scrutiny.
A pattern regulators can’t ignore
The Tennessee case checks every box that triggers federal False Claims Act investigations: a facility accepting government payment while allegedly providing services that failed to meet basic standards. Federal prosecutors call it “worthless services” liability — the legal theory that billing for care so deficient it has no therapeutic value is itself fraud.
Courts have upheld the theory in nursing home cases before, and it’s been used to recover tens of millions of dollars across the country.
Wound care failures, inadequate fall prevention, and infection control lapses — the issues cited in this case — are among the most common deficiencies cited in federal nursing home inspections. That they persisted long enough for regulators to suspend admissions in 2023 suggests systemic breakdowns, not isolated incidents.
The $2 million settlement covers the period from 2019 through 2024. The claims resolved by the settlement are allegations only — no formal determination of liability was made.
American Health Partners has since sold its American Health Communities and Rehab America divisions, according to earlier reports.
