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Aug 22, 2021 by |

California And San Francisco Whistleblower Attorney: Rehab to Pay $2 Million to Resolve False Claims Act Allegations


Accusations Of Unnecessary Rehabilitation Therapy Services

11 Skilled Nursing Facilities Involved

Former Program Director Was Whistleblower 

According to the Centers for Medicare & Medicaid Services improper payments for Medicare and Medicaid services totaled $25.74 billion in 2020 alone.  Often, the payments were made by the government for services that were never performed or were unreasonable or unnecessary for given the condition of the Medicare recipient.  One such case is discussed below and illustrates the extent to which the government may be paying for services that an older patient simply does not need,  The primary anti-fraud enforcement statute against this kind of fraud is the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq.  Individuals are authorized under the statute to bring FCA actions on behalf of the government, and these actions are known as “qui tams” and the plaintiffs referred to as “relators.” 31 U.S.C. § 3730(b).  A qui tam action is filed under seal and remains under seal until the government investigates the case; at the end of the seal period the suit is made public.  In addition to billing for unnecessary services, healthcare fraud actionable under the FCA includes other forms of overbilling, selling unapproved drugs or medical devices, false certifications regarding the products or services provided, and eligibility records or billing for services that were never provided.  Individuals with knowledge of illegal kickbacks can be rewarded for bringing suit if the government recovers against the offending companies. If you have credible information of Medicare fraud, illegal kickbacks or other healthcare fraud in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).

Unnecessary Rehab Therapy Services

In a recent settlement announced by the U.S. Department of Justice,[1] a rehabilitation therapy service provider has agreed to pay $2 million to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare for rehabilitation therapy services that were not reasonable or necessary.  The settlement resolves allegations that, from Jan. 1, 2006, through Oct. 10, 2014, the therapy services agency 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.  The owner of those facilities previously agreed to pay $16.7 million to the United States to resolve allegations that they violated the False Claims Act based on the same allegations. The $2 million settlement resolves the therapy provider’s role in that alleged conduct.

According to the complaint, 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 defendant pressured its employed 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. 

“This settlement reflects our continuing efforts to protect patients and taxpayers by ensuring that the care provided to beneficiaries of government-funded health care programs is dictated by clinical needs, not a provider’s fiscal interests,” said Acting Assistant Attorney General Brian M. Boynton for the Department of Justice’s Civil Division. “Rehabilitation therapy companies provide important services to our vulnerable elderly population, but they will be held to account if they provide therapy services based on maximizing revenue rather than the interests of their patients.”

“The claims that patients required ultra-high levels of care appear to be driven solely by a desire to send ultra-high bills to Medicare,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California. “This case is further proof that the government will vigorously pursue those who attempt to cheat the taxpayer-funded system that pays for medical care for millions of Americans, sometimes with the help of whistleblowers who shine a light on fraud.”

Relator Rewards And Claims For Wrongful Termination

A former Director of Rehab at the defendant agency was the whistleblower in the case. He will receive $360,000 of the settlement proceeds.   Although the relator in this case was a former employee, often current employees are the individuals who have the original information of the fraud. Current employees, agents, executives, officers, and others are protected from employer retaliation for bringing false claims qui tam cases. 31 U.S.C. § 3730(h).  But despite this legal protection, employers continue to retaliate against whistleblowers.  If you are fired because you brought any fraud to light, however, you can fight back under the False Claims Act which prohibits retaliation against you for exposing the wrongdoing.  You may be entitled to sue your employer in court  and seek double back pay (with interest), reinstatement, reasonable attorneys’ fees, and reimbursement for certain costs in connection with the litigation. 31 U.S.C. § 3730(h)(2). Evans Law Firm, Inc. can represent you in any action for retaliation as well as represent you in your underlying whistleblower application.

Contact Us

If you have credible information of government contractor fraud against Medicare or Medi-Cal call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=””></a>.  In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program. 

[1] Evans Law Firm, Inc. was not involved in the cases in any way. The qui tam case is captioned U.S. ex rel. Pennetti v. Interface Rehab, et al., Case No. CV-14-4133 (C.D. Cal.)

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