Some skilled nursing facilities are providing services that patients don’t
really need, just in order to be able to bill Medicare and Medicaid more.
The problem’s not small — the Office of the Inspector General
for Health and Human Services says that fraud and waste at SNFs are costing
taxpayers $1.5 billion a year.
The Government is looking to whistleblowers to help stop the healthcare
fraud that is draining Medicare’s resources, and it is willing to
pay them 15% to 30% of what it recovers.
I’ll be doing a two part series on whistleblowers who have stopped
fraud by SNFs that were providing medically unnecessary and unreasonable
services just because they wanted to make more money.
What these Whistleblowers Did to Stop SNFs that Were Offering Services
that Were Not Medically Reasonable or Necessary
These whistleblowers filed suit under the False Claims Act to alert the
Government to the fact that a SNF was giving unnecessary services to patients
in order to increase the amount that Medicare and Medicaid would have
to pay. By filing under the Act, they became entitled to 15% to 30% of
what the Government recovered as a result of the suit.
What are Medically Necessary Services?
Medicare has only so many dollars to spend, and it has made the pretty
obvious decision that it wants to spend those dollars on medical care
that actually matters. If medical care is not really necessary, Medicare
Services are medically necessary if the documentation indicates they meet
the requirements for medical necessity including that they are skilled,
rehabilitative services, provided by clinicians (or qualified professionals
when appropriate) with the approval of a physician/NPP, safe, and effective
(i.e., progress indicates that the care is effective in rehabilitation
Medicare Benefit Policy Manual, Ch. 15, Section 220.3(A).
Life Care Centers
* Government: $145 million
* Whistleblowers: $29 million
Thanks to a False Claims Act lawsuit filed by a whistleblower, Life Care
Centers paid $145 million for providing unnecessary rehabilitation at
SNFs. The whistleblowers explained that Life Care determined how many
minutes of therapy to provide based on how many minutes it would take
for Life Care to reach the next highest reimbursement rate for the patient,
not how much the patient actually needed. The two whistleblowers received
$29 million for helping the Government stop the fraud. The two whistleblowers,
former Life Care employees, filed suit in the Eastern District of Tennessee,
where the company is headquartered.
* Government: $125 million plus additional settlements with SNFs
* Whistleblowers: $24 million
In a January 2016 settlement, RehabCare Group paid $125 million to address
charges it had overbilled the government for rehab provided at skilled
nursing facilities. Two whistleblowers described a number of fraudulent
practices, including allegations that the group was estimating or rounding
therapy minutes instead of reporting the actual number of minutes of therapy
that had been provided to the patient. A host of other SNFs were accused
of overfilling because they hired and then failed to monitor RehabCare
Group. For example, Life Care Services LLC, of Des Moines, Iowa, and CoreCare
V LLP, doing business as ParkVista in Fullteron, California, paid $3.75
million to resolve allegations about them. Episcopal Ministries to the
Aging paid another $1.3 million for therapy billed by a SNF it owned,
William Hill Manor, in Easton, Maryland. The Government paid the whistleblowers
nearly $24 million for their work helping the Government get back the
* Ongoing litigation
The Government intervened in three whistleblower suits against HCR Manorcare,
a mega-chain that operates 281 SNFs in 30 states. DOJ and the whistleblower
say HCR Manorcare pressured its therapists and administrators to meet
unrealistic billing goals by providing more therapy — regardless
of whether patients actually needed it. According to the allegations,
HCR Manorcare actually threatened to fire employees who refused to give
patients enough treatments to let them qualify for the “Ultra High”
level of Medicare reimbursement rates.