 |
| Qui Tam Case Involving SNFs |
It is very common for these cases to settle since the legal and expert fees alone can cost hundreds of thousands of dollars. Worse, if the case goes to trial and the health care facility loses, the provider can be barred from Medicare. A settlement offers a certain result. However, these cases need to be fought aggressively in order to keep the settlement payments down or to get the cases dismissed if possible.
The settlement resolves allegations that for over 7 years (from January 1, 2006 through October 10, 2014), Interface knowingly submitted or caused the submission of false claims for medically unreasonable and unnecessary “Ultra High” levels of rehabilitation therapy for Medicare Part A residents at 11 Skilled Nursing Facilities. These facilities include Colonial Care Center, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge, Imperial Care Center, Laurel Convalescent Hospital, Live Oak Rehabilitation Center, Longwood Manor Convalescent Hospital, Monterey Care Center, San Gabriel Convalescent Center, and Whittier Pacific Care Center.
This case arose out of another case involving Longwood Management Corporation. In July 2020, the Department of Justice announced that Longwood Management Corporation and 27 affiliated skilled nursing facilities agreed to pay $16.7 million to the United States to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary. The settlement announced today resolves Interface’s role in that alleged conduct.
During the relevant time period, Medicare reimbursed skilled nursing facilities at a daily rate that reflected the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities was for “Ultra High” therapy patients, who required a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, or speech therapy), one of which had to be provided five days a week.
The United States contends that Interface pressured therapists to increase the amount of therapy provided to patients in order to meet pre-planned targets for Medicare revenue. These alleged targets could only be achieved by billing for a high percentage of patients at the “Ultra High” level without regard to patients’ individualized needs.
The government argued that the claims that patients required ultra-high levels of care appeared to be driven by a plan to send ultra-high bills to Medicare. The government has asserted that in the future, it will be aggressive in its auditing and review of SNFs who provide rehabilitation therapy.
This civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Keith Pennetti, a former Director of Rehab at Interface. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Mr. Pennetti, will receive $360,000 of the settlement proceeds.
These cases involve a number of departments. In this case, the resolution was a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California with assistance from the U.S. Department of Health and Human Services Office of Inspector General and the Defense Criminal Investigative Service.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
