Strauss Ventures LLC, operating as The Grand Health Care System, along with 12 affiliated skilled nursing facilities, has agreed to resolve allegations of violating the False Claims Act by billing federal health care programs for unreasonable, unnecessary, or unskilled therapy services.
"We expect nursing facilities to provide only reasonable and appropriate amounts of skilled rehabilitation therapy service to their residents and to bill government healthcare programs only for the services actually provided," stated Principal Deputy Assistant Attorney General Brian Boynton of the Justice Department's Civil Division. "The department is committed to protecting both vulnerable nursing home patients and taxpayers against fraudulent conduct by unscrupulous actors."
The settlement addresses claims that from January 1, 2014, to September 30, 2019, The Grand knowingly submitted false claims for rehabilitation therapy at its 12 facilities. During this period, Medicare Part A and TRICARE reimbursed these services based on the minutes of skilled rehabilitation therapy provided. The Grand allegedly billed for more therapy than was necessary or did not provide the reported amount.
As part of the settlement, The Grand admitted that former management implemented quotas related to beneficiaries' lengths of stay and billing at the highest reimbursement level. Facilities often scheduled patients for therapy without considering individual clinical conditions. Additionally, The Grand directed limited patient discharges per week and required corporate approval before discharging Medicare Part A patients from therapy. This led some Medicare beneficiaries to receive longer-than-necessary therapy.
The Grand acknowledged instances where supervisory officials set or adjusted therapy minutes without evaluating patients personally and falsified records in their electronic system.
"Today's settlement protects patients and taxpayers by ensuring that medical treatment is dictated by patient need and not by financial motive," said U.S. Attorney Carla B. Freedman for the Northern District of New York. "Skilled nursing facilities provide important services to a vulnerable population, and we will continue to hold them accountable when they provide patients with unnecessary services and falsify records."
The settlement also resolves allegations that The Grand submitted false Medicaid claims at its Pawling, New York facility between January 1, 2016, and June 30, 2021.
Additionally, The Grand entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), requiring an independent review organization to annually assess the necessity and appropriateness of billed therapy services.
"Violations of the False Claims Act are absolutely unacceptable," said Executive Assistant Director Michael Nordwall of the FBI’s Criminal Division. "We will continue our work protecting American taxpayers by pursuing businesses that do not comply with the rule of law."
"As part of this settlement, defendants acknowledged obtaining funds from Medicare unlawfully," stated Special Agent in Charge Naomi Gruchacz of HHS-OIG. "Participants in federal health care systems must obey laws preserving program integrity."
"Protecting healthcare system integrity for military members is a top priority," added Acting Special Agent in Charge Brian J. Solecki of DCIS Northeast Field Office.
The whistleblower lawsuit was filed under qui tam provisions by Stacey Rosenberger and Kelley Retig. They will receive approximately $4 million from the settlement proceeds.
Senior Trial Counsel Christelle Klovers from the Civil Division's Commercial Litigation Branch and Assistant U.S. Attorney Adam J. Katz prosecuted the case.