SNFs Accused of Billing for Unnecessary Services Settle for $3.75 Million

Two skilled nursing facilities (SNFs) that were alleged to be involved in a scheme of billing and submitting claims for unnecessary and unreasonable rehabilitation services, executed a settlement agreed that stated it would pay $3.75 million to the government. Life Care Services, LLC (LCS) and Core Care V, LLP doing business as ParkVista (ParkVista), were reportedly accused of retaining RehabCare Group East, Inc. (RehabCare), to provide such services and of failing to prevent RehabCare’s “practices designed to inflate Medicare reimbursement.”

LCS and ParkVista

LCS is described by the Department of Justice (DOJ) as a manager of SNFs; it is located in Des Moines, Iowa. ParkVista is a SNF located in Fullerton, California. According to the DOJ, LCS operated ParkVista as well as an additional Massachusetts facility and that LCS suggested that the these facilities hire RehabCare and, in turn, caused ParkVista and the Massachusetts to submit the false claims created by improper billing practices.

Allegations

Specifically, the government accused LCS and ParkVista of several improper billing practices including: (1) presumptively placing patients in the highest reimbursement level of therapy without giving credence to each patient’s individualized evaluations showing their specific level of required care; (2) after placing patients in the highest reimbursement level of therapy, only providing the minimum number of minutes for that therapy and discouraging any therapy beyond that minimum time; (3) “arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved;” and (4) rounding and estimating minutes for reporting. In general, the government contended that these practices resulted in the submission of false claims to Medicare for unnecessary and unreasonable services.

Case Details

The case against LCS and ParkVista was handled by the U.S. Attorney’s Office for the District of Massachusetts and the DOJ Civil Division’s Commercial Litigation Branch as well as HHS, the HHS Office of Inspector General, and the FBI. According to the DOJ, the identification of the alleged wrongdoing in this matter and the subsequent settlement is a result of the efforts of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which is part of a joint effort of the Attorney General and the Secretary of HHS. CMS Medicare fraud outreach materials note that HEAT was established to “build and strengthen existing programs combatting Medicare fraud while investing new resources and technology to prevent fraud and abuse.”