HCR ManorCare hit with False Claims Act complaint

DOJ alleges home health provider submitted claims for medically unnecessary therapy services

The Department of Justice (DOJ) has filed a False Claims Act complaint against HCR ManorCare, alleging that the home health provider "knowingly and routinely" submitted Medicare and Tricare claims for rehabilitation therapy services that were not medically necessary.

The complaint states that skilled nursing facility (SNF) administrators and therapists felt pressure to provide the services because "ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients' actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments."

In addition, the DOJ said, ManorCare allegedly boosted Medicare payments by allegedly keeping patients at their facilities even though they were medically ready for discharge.

HCR, an Ohio-based healthcare real estate investment firm, operates 283 nursing facilities in 30 states. The company told the Wall Street Journal it will "vigorously defend" the complaint, which it attributes to a "billing dispute."

In a letter to employees and business partners, HCR said the complaint "stems from the government's view that our industry as a whole is providing a level of care to Medicare rehabilitation patients that exceeds the government's expectations," according to the Journal.

The complaint stems from three lawsuits filed under the False Claims Act's whistleblower provisions, the DOJ said. The lawsuits have been consolidated into a single complaint.

Legal experts have been keeping an eye on so-called "worthless services" cases in the past year, FierceHealthPayer: AntiFraud previously reported. The heightened attention results from numerous cases, including those that took place at skilled nusring facilities. In the largest settlement to date, the federal government settled substandard care allegations with Extendicare for $38 million in October 2014.

For more:
- here's the Department of Justice statement
- read the Wall Street Journal article

Related Articles:
Legal experts keep watchful eye on 'worthless services' cases
Legal report highlights key takeaways for SNFs regarding False Claims Act liability
Feds settle substandard care allegations with Extendicare for $38M