The US Attorney’s Office has filed a joint complaint with the Massachusetts Attorney General’s Office under the federal and Massachusetts False Claims Acts against 19 skilled nursing facilities (SNFs) in Massachusetts and Connecticut and their present and former management companies, the owner of the management companies, an executive, and a long-term care (LTC) therapy consulting company.
The complaint alleges that, between 2017 and 2023, the management companies, under the direction of the owner, executive, and the consulting company, fraudulently caused the submission of claims to Medicare and Medicaid (via MassHealth and its managed care organizations) for medically unreasonable and unnecessary services to patients at their SNFs. The defendants’ scheme allegedly resulted in millions of dollars in damages to the Medicare and Medicaid programs.
Specifically, the complaint alleges that the management companies, at the owner’s direction, systematically caused Medicare to be billed for the highest level of skilled rehabilitation therapy services at their SNFs in Massachusetts and Connecticut, despite patients not clinically needing those services. The executive facilitated the owner’s plan by ensuring that patient records supported billing for such services—including altering and amending records despite knowing he was not authorized to do so at his licensing level, without having assessed or spoken to the patients, and often without consulting clinicians about the changes he personally made. The United States also alleges that the management companies, under the direction of the owner and executive, improperly directed the third-party billing company to bill Medicare for the highest-level skilled rehabilitation therapy services. This occurred before the necessary clinical documentation was even complete.
The complaint further alleges that the LTC consulting company conspired with the management companies to cause the submission of fraudulent claims to Medicare by scheduling therapists to provide unnecessary services, contrary to patients’ medical needs, to justify billing at the highest level. When the consulting company’s therapists refused to provide services they deemed unnecessary or unreasonable, their managers threatened employment action to pressure them to comply.
Massachusetts contends that the management companies, directed by the owner and the executive, submitted inflated claims to MassHealth for LTC services performed for patients at the management companies’ SNFs in Massachusetts. Between 2017 and 2023, the companies operated SNFs in Amesbury, Danvers, Greenfield, Harwich, Holyoke, Lowell, Quincy, Saugus, Taunton, and Worcester. The complaint alleges that the companies, their owner, and the executive altered documentation to support billing for increased LTC services, even though the patients did not clinically need the additional services.
“Taxpayers who fund the Medicare and Medicaid programs expect skilled nursing facilities to bill those programs honestly and accurately,” said Roberto Coviello, Special Agent in Charge of the US Department of Health and Human Services (HHS), Office of Inspector General (OIG). “The integrity of our federal healthcare system is undermined when that expectation is not met, and we will continue to thoroughly pursue allegations of False Claims Act violations.”
Compliance Perspective
Issue
Federal healthcare programs, including Medicare and Medicaid, reimburse providers for medically reasonable and necessary services rendered to SNF patients. Both the federal and Massachusetts False Claims Acts prohibit individuals or entities from submitting, or causing the submission of, false claims for payment and false statements material to a claim for payment from the respective governments. In fiscal year 2024, healthcare fraud continued to be a leading source of False Claims Act settlements and judgments. Providing unnecessary medical services not only wastes taxpayer funds but can also expose patients to harmful procedures or cause them to miss out on potentially more effective treatments. The False Claims Act imposes treble damages and penalties on individuals who knowingly submit false claims or fail to pay money owed to the United States.
Discussion Points
- Review your policies and procedures related to documentation accuracy, compliance with Medicare and Medicaid regulations, and preventing false claims.
- Provide training to appropriate staff on ensuring the accuracy of Medicare and Medicaid billing and supporting documentation before claims are submitted. Regularly train staff on compliance and ethics policies, and make sure they understand the significance of identifying and reporting any potential compliance violations to their supervisor, the compliance officer, or via the anonymous hotline.
- Periodically conduct audits of Medicaid and Medicare documentation and billing practices to prevent errors from becoming false claims. Audit to ensure that the Triple Check Process is being followed for Medicare claims and that all supporting documentation is accurate before submission. Address and correct any irregularities promptly.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
