A now-defunct physical therapy center and four nursing homes will pay $9.7 million in Medicare fraud penalties to resolve allegations that they violated the False Claims Act.

The U.S. Attorney’s Office in Chicago said a skilled-therapy service business known as Quality Therapy & Consultation Inc. and its owner, Frances Parise, schemed with four different skilled nursing facilities to pad reimbursements from Medicare.

Each patient has a Resource Utilization Group (RUG) score indicative of a patient’s care needs. According to the American Speech-Language-Hearing Association, the RUG score is based on the level of physical therapy, occupational therapy and speech therapy a patient receives. The complexity of the skilled nursing care a patient needs is part of the equation, as well. A higher RUG score equals a higher amount of money paid by the Medicare system to the nursing facility.

The therapy business and nursing homes allegedly upcoded the patients’ RUG scores to receive higher Medicare reimbursements and provided therapy to patients who either didn’t need it or could not benefit from such intervention.

Katherine V., who worked at Quality Therapy as an occupational therapist, will receive a $1.9 million award for blowing the whistle on the scheme that resulted in the federal government filing the whistleblower lawsuit through the False Claims Act in 2014.

Facilities to Pay Medicare Fraud Penalties

Parise will pay $160,000 and is barred from participating in Medicaid and/or Medicare health programs for five years.

The skilled nursing home facilities will pay the following Medicare fraud penalties:

• Carlton at the Lake: $3.63 million.
• Lakeshore Healthcare: $2.73 million.
• Balmoral Home: $1.17 million.
• Quality Therapy and Consultation, formerly located in suburban Orland Park: $1.09 million.
• Ridgeview Rehab: $1 million.

The U.S. Attorney’s Office in Chicago said the civil allegations are accusations only, and no determination of liability was made as part of the settlements and consent judgments.

The False Claims Act enables whistleblowers who have evidence of fraud in the use of federal programs or contracts to file a lawsuit on behalf of the U.S. government, and the government has the right to intervene and join as a plaintiff.

According to the National Whistleblowers Association, as one of the provisions of the False Claims Act, the employee who blows the whistle may not be discharged, demoted, harassed or in any way discriminated against because they reported the fraudulent activity. If the employee does suffer any retaliation, the employee may be entitled relief such as reinstatement of employment, double back pay and compensation for any damages, litigation fees or lawyer fees.

Financial awards are provided to whistleblowers because of the risks they take to share information with the government that the government could not have discovered on its own. The vital inside information that whistleblowers provide often helps stop millions of dollars from being fraudulently collected by unscrupulous actors who take advantage of federal contracts and government programs, many of which are designed to help the poor and elderly.

The Medicare system has been the target of so many fraudsters that a Medicare Fraud Strike Force was established in March 2007 and now operates in 23 districts. The Medicare Fraud Strike Force has charged almost 4,000 different defendants who have allegedly falsely billed the Medicare program for more than $14 billion.

This article is not legal advice. It is presented
for informational purposes only.