Nursing home companies pay $3.75 million to settle claims for rehabilitation services provided by contractor

by Ben Vernia | September 15th, 2014

On September 5, the Department of Justice announced that two nursing home companies had agreed to pay a combined $3.75 million to settle civil claims that the companies permitted a rehabilitation services contractor, RehabCare, to provide worthless services at their facilities and then bill those claims to federal health care programs. According to DOJ’s press release:

Life Care Services LLC (LCS), a manager of skilled nursing facilities based in Des Moines, Iowa, and CoreCare V LLP, doing business as ParkVista, a skilled nursing facility in Fullerton, California, have agreed to pay a total of $3.75 million to the government for causing the submission of false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc.

* * *

LCS has operated and managed skilled nursing facilities across the country, including ParkVista and, until 2013, a facility in Massachusetts. At the suggestion of LCS, ParkVista and the Massachusetts facility hired RehabCare to provide rehabilitation therapy services at their facilities.

The settlement resolves allegations that ParkVista submitted and LCS caused both ParkVista and the Massachusetts facility to submit false claims for rehabilitation therapy. The government alleges that LCS and ParkVista failed to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement to the facilities. The government contended that the reported therapy did not reflect the lower amounts of therapy generally provided to patients over the course of their stay.

The settlement further resolves allegations that LCS and ParkVista failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: in lieu of using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs, presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy; providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved; and reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.

The case apparently arose from a government investigation, and not from a whistleblower, or qui tam, lawsuit.

Leave a Reply

Recent Posts

Recent Comments