DOJ AND WHISTLE-BLOWERS TARGET SKILLED NURSING OPERATIONS IN FRAUD LAWSUITS

 

“The government is increasingly scrutinizing skilled nursing facilities for medically unnecessary therapies,” which “has acted as a clarion call to whistle-blowers,” according to Joseph E.B. “Jeb” White, a whistle-blower attorney with Nolan Auerbach & White PA in Philadelphia.

SNF chain SavaSeniorCare LLC is one target of the government’s push into skilled nursing facility fraud enforcement, failing in its efforts to block a False Claims Act lawsuit from the federal government that accuses the company of widespread Medicare fraud (United States ex rel. Hayward v. SavaSeniorCare, LLC, 2016 BL 318672, M.D. Tenn., No. 3:11-cv-821, 9/27/16).

A federal trial court Sept. 27 refused to dismiss three separate, now consolidated, lawsuits filed by former Sava employees, that alleged the company instituted a companywide scheme to push unnecessary and intensive physical therapy on Sava patients to reap increased Medicare reimbursements.

The government, which intervened in the cases, said these fraudulent policies were enforced from the top of the company down through its 185 skilled nursing facilities nationwide from 2008 through 2012, during which Sava collected $1.4 billion in Medicare reimbursements.

The government supported its claims with 20 specific examples of Medicare claims for what it said were unnecessary therapy services administered to five patients that were products of the fraudulent scheme, as well as e-mail conversations between Sava executives demanding increased billing from facilities and methods to increase payments for therapy treatments provided to patients.

The federal government is involved in several other health-care fraud enforcement actions involving SNFs.

A settlement is pending in United States ex rel. Martin v. Life Care Ctrs. of Am., Inc. (E.D. Tenn., No. 1:08-cv-251, stay entered 9/22/16), which also involved allegations of unnecessary therapy at a SNF company to increase Medicare reimbursements. In addition, North American Health Care Inc. Sept. 19 paid $28.5 million to settle allegations of unnecessary therapy billings at its SNFs.

Three owners and operators of SNFs in Miami were also charged criminally July 22 in a $1 billion nursing home fraud scheme, the largest ever, according to the Department of Justice.

Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center.

Learn more about Bloomberg Law and sign up for a free trial.