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US Sues Large Tennessee Nursing Home Provider For Therapy Fraud

January 9, 2013

The United States has intervened in a qui tam False Claims Act case against Tennessee-based nursing home operator Life Care Centers of America, Inc.  The US and the whistleblowers claim that Life Care has defrauded the Medicare system out of “millions of dollars” by performing unnecessary, often harmful therapy on its nursing home patients.

Under the Medicare skilled nursing benefit, the Medicare program pays nursing home providers for skilled therapy based on each patient’s “Resource Utilization Group” (RUG).  If a patient requires extensive, frequent therapy and receives it, the patient will fall into an “Ultra High” RUG group, and the provider will receive the highest rate.

According to DOJ, Life Care has billed patients as “Ultra High” when the patients did not need that level of therapy, could not benefit from it, and were sometimes harmed by receiving it.   The complaint alleges that Life Care therapists “cruised” its nursing facilities looking for patients on whom they could perform therapy, to drive those patients into higher RUG groups and boost Life Care’s Medicare payments.  Often in this type of situation, the patients may be severely demented, even near death, and unable to benefit from any therapy.  The US further alleges that Life Care ignored the care recommendations of its therapists and retained patients – billing the United States – long after the patients ceased to benefit from further therapy.

HHS has recently concluded that for-profit nursing homes over-bill the United States for some $1.5 billion a year for unnecessary skilled care, as reported here.  Frohsin & Barger has extensive experience in prosecuting therapy and “RUG fraud” cases.  You can read more about this type of fraud on this blog, here.  To report skilled nursing or therapy fraud, contact Frohsin & Barger.

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