Four Illinois Nursing Homes and One Physical Therapy Center Agreed to Pay $9.7 Million to Settle Allegations of False Claims Act Violations
A U.S. Attorney’s Office recently announced that four Illinois nursing homes and one physical therapy center have agreed to pay $9.7 million to resolve civil allegations that they violated the False Claims Act by providing unnecessary services to increase Medicare payments.
The allegations were part of a whistleblower (qui tam) lawsuit filed by a former employee of the physical therapy center.
In order to increase Medicare reimbursements, the four nursing homes and the physical therapy center conspired to “upcode” the Resource Utilization Group (RUG) scores. The upcoding involved raising the care requirements for residents to indicate a higher and more complex level of care. Higher RUG scores for residents meant greater reimbursement amounts paid by Medicare. The lawsuit also claimed that the healthcare providers gave skilled therapy to residents who did not need it or could not benefit from it. This was done to bill Medicare for the highest possible amount.
The owner of the physical therapy center, as part of the settlement, agreed to be excluded from all participation as a provider in Medicare and Medicaid and all federal health care programs for a period of five years.
Compliance Perspective
Failure to verify that the level and medical necessity for skilled therapy provided is what residents need or can benefit from, and failure to ensure that RUG score upcoding to higher and more complex levels of care does not occur, may result in violations of the False Claims Act.
Discussion Points:
- Review policies and procedures regarding protocols to ensure that RUG scores submitted are appropriate for the needs of residents.
- Train staff who review and submit the RUG codes for Medicare reimbursement to follow protocols for verifying accurate assessments and reporting of skilled therapy provided to residents.
- Periodically audit residents’ records to confirm that the type of skilled therapy that is provided is actually needed and beneficial for the residents.
