Select Medical Corporation, Medicare Fraud, New York 2016

Select Medical Corporation and its successor-in-interest, Encore GC Acquisition LLC, have agreed to pay $8.4 million to resolve allegations that their rehabilitation therapy services were not reasonable, necessary or skilled, leading to false claims being submitted to Medicare.

According to the allegations, between January 1, 2010, and March 31, 2016, Select Medical Rehabilitation Services Inc. (SMRS) provided contract rehabilitation therapy services to 12 skilled nursing facilities in New York and New Jersey. The United States alleged that SMRS’ corporate policies and practices encouraged and resulted in the provision of medically unnecessary, unreasonable and unskilled therapy services.

‘Today’s settlement reflects our commitment to protect patients and taxpayers by ensuring that the care provided to Medicare beneficiaries is dictated by their individual clinical needs and not by a provider’s financial interests,’ said Acting Assistant Attorney General Brian M. Boynton of the Civil Division.

‘Skilled nursing facility residents and their families must be assured that the care and therapy that residents receive is based on medical need, not greed,’ said Acting U.S. Attorney Rachael A. Honig for the District of New Jersey.

The civil settlement includes the resolution of claims brought under the qui tam provisions of the False Claims Act by Melissa Vail, a former SMRS employee. The qui tam case is captioned U.S. ex rel. Vail v. Select Medical Corporation et al., No. 2:16-cv-03569 (D.N.J.).

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG and the FBI Newark Field Office.

The claims resolved by the settlement are allegations only, and there has been no determination of liability. Select Medical Corporation, a healthcare provider, has agreed to pay $8.4 million to resolve allegations of Medicare fraud in New York and New Jersey.

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