$133M Nursing Home Therapy Scam Exposed

Grimy Times has uncovered a massive nursing home therapy scam, with RehabCare, now part of Kindred Healthcare, and four skilled nursing facility operators coughing up over $133 million to settle allegations of falsely inflating therapy reimbursement claims to Medicare.

The scheme, which was facilitated by RehabCare, involved fraudulently placing patients in the highest therapy category, rather than relying on individualized evaluations. This allowed nursing facilities to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy outside of designated assessment periods.

The complaint outlines a sophisticated scheme that included ‘ramping,’ or boosting therapy during assessment periods, scheduling and reporting therapy even after patients were recommended for discharge, and arbitrarily shifting therapy minutes between disciplines to meet targeted reimbursement levels.

‘Medicare beneficiaries are entitled to receive care that is dictated by their clinical needs rather than the fiscal interests of healthcare providers,’ said Acting Assistant Attorney General Benjamin C. Mizer for the Justice Department’s Civil Division. ‘All providers, whether contractors or direct billers of taxpayer-funded federal healthcare programs, must be held accountable when their actions knowingly cause bills for unnecessary services.’

The settlements resolve allegations that RehabCare and the four skilled nursing facility operators, Wingate Healthcare, Essex Group Management, Fundamental Administrative Services, and Frederick County, engaged in a systematic and broad-ranging scheme to increase profits by delivering or purporting to deliver therapy in a manner that focused on increasing Medicare reimbursement rather than on the clinical needs of patients.

US Attorney Carmen M. Ortiz said, ‘The complaint outlines the extent and sophistication of this fraud, and the government’s continuing work to ensure that the provision of care in skilled nursing facilities is based on patients’ clinical needs.’

The settlements total over $133 million, with RehabCare and its nursing facility customers agreeing to pay $120 million, and the four skilled nursing facility operators paying $13 million.

The government’s complaint and exhibits against RehabCare were unsealed in conjunction with the finalization of the settlement. The case serves as a stark reminder that Medicare beneficiaries are entitled to receive care that is dictated by their clinical needs, not the fiscal interests of healthcare providers.

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