The U.S. Department of Health and Human Services and the Office of Inspector General (HHS-OIG) announced that the United States has filed a civil healthcare fraud lawsuit against eleven New York based skilled nursing facilities, which includes their management company and owner. The lawsuit seeks damages and civil penalties under the False Claims Act for fraudulently billing Medicare for unreasonable and unnecessary services provided to patients at the eleven skilled nursing facilities.
The complaint alleges that, during the period from at least January 2010 through September 2019, defendants systematically kept patients at the facilities longer than necessary in order to maximize the amount billed to Medicare for the patients’ stays. During those stays, the facilities systematically put patients on higher levels of rehabilitation therapy than necessary based on their actual clinical needs in order to bill Medicare at the highest rate.
A part owner of ten of the eleven facilities who operates all eleven of the facilities allegedly instructed and pressured staff to engage in the fraudulent practices. In addition, in some instances, the facilities intentionally limited patients’ progress in order to create the appearances of a continued need for services. In another instance, the part owner reported to the rehabilitation services coordinator that the facilities should not allow patients to go to the bathroom by themselves because they would then think they are ready to go home.
The part owner, with the rehabilitation services coordinator’s knowledge, also instructed the staff to provide virtually all Medicare patients with therapy at the “Ultra High”—i.e., highest billing—level, without regard to the patients’ needs or whether, due to their conditions, they could benefit from this intense therapy. To qualify for the Ultra High level, a patient had to receive at least 720 minutes of skilled therapy services (i.e.,physical, occupational, or speech therapy requiring the services of a trained therapist) per week. Employees understood that there was virtually no wiggle room when it came to determining how much rehabilitation therapy a patient would receive. The pressure to provide this level of therapy led the facilities to bill for services that did not actually qualify as skilled therapy, and thus were not eligible for Medicare reimbursement (such as simply moving the limbs of patients with severe cognitive impairments or assisting with routine self-care tasks).
The part owner and the rehabilitation service coordinator’s efforts to keep Medicare patients at the facilities for as close as possible to 100 days and to provide almost all patients, without regard to need, with therapy at the Ultra High level succeeded. However, during the relevant period, the facilities were identified as significant outliers compared to other skilled nursing facilities with respect to Medicare patients’ average length of stay and levels of rehabilitation therapy.
These practices resulted in the facilities submitting claims to Medicare for rehabilitation therapy that was not reasonable or necessary, was billed at a higher rate than appropriate, or did not involve the provision of skilled services and, accordingly, were ineligible for payment. In addition, the facilities made or used false statements and records that were material to false claims submitted to Medicare for payment for rehabilitation therapy that was unreasonable, unnecessary, or unskilled.
The Government intervened in a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.
Issue:
All staff who provide skilled services must understand what constitutes reasonable and necessary skilled services. The skilled services must be based upon a patient’s ability, need, and what is reasonable for the patient. Staff should be knowledgeable and aware of what may be considered a false claim. Ensure that all staff understand that these violations can occur whether they are intentional or not. Failure to promptly report a false claim or kickback can result in citations, fines, and other sanctions. In addition, staff should be knowledgeable in how to report suspicious billing practices. A nonretaliatory environment for reporting suspicious billing practices is mandatory for all facilities. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1, Compliance and Ethics Program, CP 2.3 General Legal Duties and Antitrust Laws.
Discussion Points:
- Review policies and procedures for preventing and reporting a false claim or anti-kickback violation. Update your policies and procedures as needed.
- Train all staff on the False Claims Act and Anti-Kickback Statute and what can be considered a false claim or a kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff to ensure that they are aware of what should be done if they suspect a false claim or illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing, and monitor routinely to prevent and detect errors before they progress to a false claim.
