The U.S. Justice Department has jumped into several lawsuits alleging that HCR ManorCare, one of the largest nursing home chains in the U.S., provided medically unreasonable and unnecessary services to patients to collect more from Medicare and Tricare.
HCR ManorCare said in a statement Tuesday that the allegations are “unjust, and we will vigorously defend ourselves in court.”
“When we have identified billing issues through our controls and compliance activities, we have taken appropriate action, including at times terminating employees for misconduct and voluntarily repaying monies received for inaccurate billings,” the company said. “However, we categorically reject any attempt by the government to have our company and its employees portrayed as engaging in a systematic, corporate-wide fraud scheme.”
HCR ManorCare, owned by the Carlyle Group, operates about 281 skilled-nursing facilities in 30 states, making it one of the country's largest providers.
The government alleges the company pressured administrators and rehabilitation therapists to meet unrealistic financial goals, resulting in unnecessary services to Medicare and Tricare patients. ManorCare allegedly set billing goals that didn't take patients' actual clinical needs into account. The company also allegedly threatened to fire managers and therapists if they did not administer additional treatments necessary to quality for the highest Medicare payments.
The government alleges that ManorCare also boosted its Medicare payments by keeping patients who were medically ready to be discharged.
All these actions resulted in false claims to Medicare and Tricare, the government alleges.
ManorCare “vehemently disagrees” that it provided medically unnecessary services or more care than patients were entitled to as Medicare beneficiaries.
“This lawsuit is the result of a billing dispute between our company and the federal government that 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, despite the fact that these services were ordered by licensed physicians and delivered by licensed therapists,” ManorCare said in the statement.
ManorCare said that it provides care to patients based on their clinical needs as determined by their caregivers and that the government's assessment relies on retrospective analyses performed by “a few alleged experts who have never cared for, spoken with or even seen the patients in question.”
ManorCare also noted that its Medicare billings are submitted to and approved for payment by the CMS' own third-party fiscal intermediaries and that the government's allegations are based on reviews of fewer than 200 patients' charts from as long as nine years ago.
The government has joined three lawsuits brought by whistle-blowers against ManorCare and filed a consolidated complaint against the company. The whistle-blowers are former employees of Heartland Employment Services, which leases employees to ManorCare-owned skilled-nursing facilities: occupational therapist Christine Ribik and physical therapists Patrick Gerard Carson and Marie Slough. Heartland is also named as a defendant in the complaint.
Under the False Claims Act, whistle-blowers file lawsuits on behalf of the government, and the government may then join or decline to join the lawsuits. Whistle-blowers are entitled to a portion of the money recovered.
Defendants found liable for False Claims Act violations can be compelled to pay three times the government's losses plus civil penalties.
