Earlier this week I was asked to comment on medically unnecessary therapy and Medicare fraud. The comments were for a Texas newspaper. Texas is a state that loses an estimated $3.2 billion each year just on Medicaid fraud. Add private insurance, Medicare and VA care and the annual cost of healthcare fraud in the Lone Star State approaches $1000 per household. The Attorney General’s Medicaid Fraud Control Unit recovered $210 million last year. An impressive number but still a drop in the bucket.
Medicaid and Medicare fraud comes in many different forms. One of the biggest is from unnecessary treatment and procedures. In its most barbaric form, this includes unnecessary surgeries. At other times it can be unnecessary office visits and hospitalizations. This post looks at the settlement earlier this year involving RehabCare and its parent, Kindred Healthcare. The case involved unnecessary therapy services. RehabCare ultimately paid $125 million to settle that case. The two whistleblowers who brought the case shared an award of almost $24 million.
Unnecessary Therapy Claims Against RehabCare (Kindred)
The case was originally filed in December 2011 by two whistleblowers. Janet Halpin was a rehab manager for RehabCare in Haverhill, Massachusetts (a Boston suburb). Shawn Fahey worked as an occupational therapist working at a nursing home, also in Haverhill.
Their initial litigation focused on providing therapy services that were not medically necessary.
After three-and-a-half-year investigation, the Justice Department intervened in the complaint. The feds identified 8 different fraud schemes. The details are below. Basically, RehabCare did everything it could to charge the maximum of amount of therapy allowed by Medicare. Often the care wasn’t medically necessary. Sometimes the patients were sleeping or too ill to even engage in therapy.
Some patients requiring hospice type end-of-life care were actually in more pain from the therapy. Instead of making these patients comfortable, RehabCare was busy insuring they received the maximum 72 minutes of therapy per day even if they didn’t need it. At times, their practices were barbaric.
In simple terms, Kindred was accused of putting patients over profits.
Specific Medicare Fraud Allegations
>Presumptively placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs;
> “Ramping,” i.e., boosting the amount of reported therapy during so-called “assessment reference periods,” thereby causing nursing homes to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy to those same patients outside the assessment reference periods, when the SNFs were not required to report to Medicare the amount of therapy RehabCare was providing to their patients;
>Scheduling and reporting the provision of therapy to patients even after the patients’ treating therapists had recommended that they be discharged from therapy;
>Arbitrarily shifting the number of minutes of planned therapy between different therapy disciplines (i.e., physical, occupational, and speech) to ensure targeted therapy reimbursement levels were achieved, regardless of the clinical need for the therapy;
>Providing significantly higher amounts of therapy at the end of a therapy measurement period not due to medical necessity but to reach the minimum time threshold for the highest therapy reimbursement level and thus to cause and enable nursing homes to bill for the care of their Medicare patients accordingly, even though the patients were receiving materially less therapy on preceding days;
>Inflating initial reimbursement levels by reporting time spent on initial evaluations as therapy time in violation of the Medicare prohibition on counting initial evaluation time as therapy time;
>Reporting that skilled therapy had been provided to patients when in fact the patients were asleep or otherwise unable to undergo or benefit from skilled therapy, e.g., when a patient had been transitioned to palliative end-of-life care; and
> Rounding up minutes of therapy instead of reporting the actual minutes of care provided.
What makes this case so important is RehabCare’s sheer size. They are the largest therapy provider in the nation and with Kindred, provide services to more than 1000 skilled nursing facilities in 44 states. Instead of setting an example, however, Kindred was showing its true colors. Greed.
The case was brought in Massachusetts where the two whistleblowers worked. In announcing the settlement, Boston’s U.S. Attorney Carmen Ortiz said, “This False Claim Act settlement addresses allegations that RehabCare and its nursing facility customers engaged in a systematic and broad-ranging scheme to increase profits by delivering, or purporting to deliver, therapy in a manner that was focused on increasing Medicare reimbursement rather than on the clinical needs of patients. The complaint outlines the extent and sophistication of this fraud, and the government’s continuing work to ensure that the provision of care in skilled nursing facilities is based on patients’ clinical needs.”
While Kindred’s case may be the largest prosecution of medically unnecessary therapy services, these schemes continue today. And with that the opportunity for more whistleblower awards.
False Claims Act, Whistleblower Awards & Medically Unnecessary Therapy
The Kindred / RehabCare case was brought under the federal False Claims Act. That law pays whistleblower awards to people with inside information about Medicare and Medicaid fraud. That includes medically unnecessary care and treatment.
Under the Act, a whistleblower can receive up to 30% of whatever is collected from the wrongdoers. This award provision allowed Janet Halpin and Shawn Fahey to receive almost $24 million from a $125 million settlement.
To qualify for an award, you need inside, original source information and must be the first to file. Qualifying also means filing a sealed complaint (lawsuit) in federal court.
Are You the Next Whistleblower?
Becoming a whistleblower is not easy. That is why we consider them true American heroes. They put their job, career and reputation on the line to stop fraud and greed. (Retaliation is illegal but it happens.) In the case of some unnecessary medical care such as unneeded surgeries, they also save lives.
If you have information about medically unnecessary therapy or other treatment, call us. Our mission is to protect you from unlawful retaliation, to empower you to stop fraud, and to collect the maximum award allowed. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept confidential.
MahanyLaw – Over $100 Million in Awards and Counting.