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Spotlight on Nursing Home Fraud

There has been a lot of attention lately to nursing home fraud, which is heavily reimbursed by Medicare.  In January, the  U.S. Attorney’s Office for the District of Massachusetts and the U.S. Department of Justice reached a $125 million Medicare fraud settlement with Kindred/RehabCare, the country’s largest nursing home therapy provider. In February,  the Boston Globe reported on new efforts by the Commonwealth of Massachusetts to regulate nursing home providers, following an investigative series the Globe did last year about “how an out-of-state chain had assembled its string of nursing homes with scant attention from regulators. That company, Synergy Health Centers, has been beset by reports of substandard care — festering pressure sores, medication errors, poor infection control, inadequate training, and short-staffing.”

The DOJ settlement by contract therapy providers RehabCare Group Inc., RehabCare Group East Inc., and their parent, Kindred Healthcare Inc., resolved allegations raised by whistleblowers that the company violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, or that never occurred. RehabCare is the largest provider of therapy in the nation, contracting with more than 1,000 SNFs in forty-four states to provide rehabilitation therapy to their nursing home patients.  In addition to the settlement with Kindred/RehabCare in January, the DOJ also settled claims with four SNFs for their role in submitting false claims to Medicare; those settlements totaled some $8.225 million. Previously, DOJ had reached settlements totaling over $500 million with a number of other SNFs who had contracted with RehabCare and allegedly submitted false claims to Medicare.

The list of allegations against Kindred/RehabCare is breathtaking, even for someone who may have become somewhat jaded or cynical about the depths of health care fraud in this country. Perhaps the most troubling one is “Reporting that skilled therapy had been provided to patients when in fact the patients were asleep or otherwise unable to undergo or benefit from skilled therapy (e.g., when a patient had been transitioned to palliative end-of-life care).” Really?

Meanwhile, the Boston Globe series highlighted a different kind of concerns—substandard quality of care provided to patients, such as festering pressure sores, medication errors, poor infection control, inadequate training, and short-staffing. This too is a form of Medicare fraud—the patients are not getting the services Medicare is paying for. Worse yet, they are being injured. (See also earlier article in Globe exposé.)

Vigilance is needed by all of us to protect the lives and quality of care of our nursing home population as well as to protect our Medicare dollars. We applaud the whistleblowers, the government, and the media for keeping the focus on this industry.