DOJ Going after Therapy Providers Underneath the FCA

Since many lately spotlighted through the Department of Justice’s intervention in whistleblower claims against ManorCare, DOJ is growing its enforcement from the False Claims Act (FCA) against therapy providers. Particularly, DOJ has elevated both civil and criminal research in to the billing and supplying of therapy minutes. A minimum of five FCA cases concerning therapy minutes moved in the millions in 2014 and 2015, and a minimum of a couple of individuals cases settled for more than $$ 30 million each. The magnitude and elevated frequency of those pay outs suggests there are usually many still-private research being carried out country-wide, and DOJ’s recent intervention within the whistleblower situation against ManorCare verifies DOJ remains willing to litigate these cases.

While particular allegations vary around the margins, DOJ’s scrutiny of therapy practices is typical at its core. Practices DOJ has asked include:

• Presumptive placement of patients at maximally-reimbursable reimbursement levels (ultrahigh RUG rates);
• High numbers of patients being placed at maximally-reimbursable reimbursement levels;
• Minutes billed at and not above minimum to meet reimbursement levels;
• Minutes seemingly billed in intervals instead of precise billing;
• Billing for more minutes than actually provided;
• Billing initial evaluation sessions as therapy minutes;
• Selection of assessment reference dates that maximize reimbursement;
• Billing unskilled services as skilled services;
• Billing group therapy as individual therapy;
• Non-qualified individuals planning or providing therapy minutes;
• Deviations from patient plans of care to hit minimum minutes for different therapy disciplines;
• Rewarding employees or contractors in ways that may seem to incentivize excessive provision or billing of therapy minutes;
• Documentation deficiencies; and,
• Deficient medical directorship arrangements.

DOJ has contended these practices result in the submission of false claims to the government for reimbursement, resulting in FCA liability and health care fraud.

ManorCare Inc.

DOJ lately intervened in three FCA whistleblower suits against ManorCare and filed a consolidated complaint. Within the pleading, DOJ contends that ManorCare directed its managers and therapists to provide excess choose to achieve ultrahigh compensation levels which were unnecessary and caused the federal government to compensate the organization over the add up to so it was legitimately titled. ManorCare allegedly set impractical billing goals because of its facilities, threatened to terminate individuals who didn’t cooperate, and maintained patients within their facilities following the correct time for discharge, all to be able to increase compensation repayments.

Significant Recent Settlements

While the allegations against ManorCare are pending, other therapy providers have entered into major settlements rather than litigate and risk significant penalties.

Extendicare — $38 million

The federal government alleged that nursing services provided were deficient and also the provider charged Medicare and State medicaid programs for medically not reasonable and unnecessary treatment therapy services. The federal government also contended that Extendicare elevated therapy particularly during assessment reference periods therefore it could bill Medicare in the greatest possible compensation rate.

RehabCare and Rehab Systems of Missouri — $30 million

The government claimed that RehabCare paid Rehab Systems of Missouri $400,000 to $600,000 in exchange for referrals for rehabilitation services, and that RehabCare allowed Rehab Systems of Missouri to retain a percentage of the revenue generated by each referral.

ArchCare — $3.5 million; Episcopal Ministries to the Aging – $1.3 million; Life Care Services and ParkVista – 3.75 million

In all these cases, the federal government alleged these providers had engaged in a number of questionable practices, including they unsuccessful to avoid RehabCare from presumptively placing patients at greatest compensation levels, supplying the minimum minutes required to hit compensation levels, discouraging the billing of minutes past the threshold for compensation levels, and supplying unnecessary therapy to improve compensation. Within the Existence Care situation, the federal government also contended that RehabCare was incorrectly compensated a portion of revenue produced which Existence Care Services unlawfully received the disposable services of the RehabCare worker.

Not Without Warning

The elevated government activity within this arena hasn’t showed up unexpectedly. Within the last couple of years, the OIG has released a minimum of two reviews questioning the billing practices of Skilled Assisted Living Facilities (SNFs). A 2012 OIG report discovered that a 4th of SNF claims posted in ’09, amounting to $1.5 billion, were incorrect. A 2010 OIG report observed that, from 2006 to 2008, SNFs more and more charged at more costly amounts of care, for-profit SNFs were much more likely than nonprofit or government SNFs to bill for costly amounts of care, which numerous SNFs had questionable billing practices including abnormally high billings with regards to other SNFs.

An Ounce of Prevention…

DOJ’s constant quest for therapy companies demonstrates its dedication to curtail this perceived section of potential fraud and abuse. To prevent DOJ’s target, companies should routinely audit therapy minutes, provider utilization, incentives that may be seen as illegal kickbacks, and medical necessity. Additionally, skilled facilities which have contracted with therapy companies should undertake exactly the same review to prevent allegations of collusion or conspiracy. And when you uncover outliers or any other warning flags (e.g., billing limited to ultra-high RUG rates), investigate and see the reason. Should you question an exercise, relationship or system, addressing it immediately and making an exam of whether disclosure is required could save you the cost and resource allocation of the suit later on. DOJ is watching, and you ought to be, too.

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