ALBANY, NEW YORK – Strauss Ventures LLC, doing business as The Grand Health Care System, and 12 affiliated skilled nursing facilities, have agreed to resolve allegations that they violated the False Claims Act by knowingly billing federal health care programs for therapy services that were unreasonable, unnecessary, unskilled, or that simply did not occur as billed.
The settlement resolves allegations that from as early as January 1, 2014 to September 30, 2019, The Grand knowingly submitted false claims for rehabilitation therapy for residents at 12 facilities Strauss Ventures owned and operated. During this period, Medicare Part A (Medicare’s hospital insurance, which also pays for care in a skilled nursing facility in some circumstances) and TRICARE (the federal health care program for the Department of Defense) paid for such services at rates that varied based on the number of minutes of skilled rehabilitation therapy provided.
United States Attorney Carla B. Freedman stated, “Today’s settlement protects patients and taxpayers by ensuring that medical treatment is dictated by patient need and not by financial motive. Skilled nursing facilities provide important services to a vulnerable population, and we will continue to hold them accountable when they provide patients with unnecessary services and falsify records.”
As part of the settlement, The Grand admitted that certain now-former Grand management level employees implemented quotas that each of the 12 facilities was expected to reach, including quotas relating to beneficiaries’ lengths of stay and to the percentage of beneficiaries billed at the highest reimbursement level. To meet these quotas, facilities often scheduled patients to receive therapy without consideration of what was reasonable and necessary based on the individual patients’ clinical condition.
Principal Deputy Assistant Attorney General Brian Boynton stated, “We expect nursing facilities to provide only reasonable and appropriate amounts of skilled rehabilitation therapy service to their residents and to bill government healthcare programs only for the services actually provided. The department is committed to protecting both vulnerable nursing home patients and taxpayers against fraudulent conduct by unscrupulous actors.”
The settlement also resolves federal allegations that The Grand submitted false claims to Medicaid for services rendered at its Pawling, New York nursing home between January 1, 2016 and June 30, 2021. These claims were allegedly false because the reimbursement rate was inflated by data inaccurately reflecting the degree of care, including rehabilitation therapy services.
The settlement requires The Grand to pay $21.3 million to resolve the allegations. The case was handled by the U.S. Attorney’s Office for the Northern District of New York, with assistance from the U.S. Attorney’s Office for the Southern District of New York, the Medicare Fraud Strike Force, and the U.S. Department of Health and Human Services Office of Inspector General.
The settlement is part of the government’s efforts to combat healthcare fraud and abuse. The U.S. Attorney’s Office for the Northern District of New York will continue to work with law enforcement and regulatory agencies to protect patients and taxpayers from unscrupulous healthcare providers.
The case is captioned United States ex rel. [redacted] v. Strauss Ventures LLC, et al., No. 1:19-cv-00601 (N.D.N.Y.).
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Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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