New York Catholic nursing chain pays $3.5 million to settle Medicare fraud claims

The Catholic Health Care System, aka ArchCare, allowed Medicare to be billed for patient care at the highest therapy-based levels, even though its subcontractor RehabCare, was often not providing therapy at those levels, according to the U.S. Attorney's Office.

A New York operator of skilled nursing facilities has agreed to pay $3.5 million to settle allegations that it inflated Medicare claims for rehabilitation therapy, according to the U.S. Attorney’s Office.

The Catholic Health Care System, aka ArchCare, allowed Medicare to be billed for patient care at the highest therapy-based levels, even though its subcontractor RehabCare, was often not providing therapy at those levels, according to the U.S. Attorney’s Office.

Prior to Oct. 1, 2011, the ArchCare facilities failed to take sufficient steps to prevent RehabCare from engaging in a pattern and practice of providing high levels of therapy that were not reasonable or necessary during so-called “assessment reference periods,” when ArchCare was required to report to Medicare the amount of therapy it was providing to its patients, according to the allegations.

[Also: CHS pays $75 million over alleged Medicaid fraud]

ArchCare billed Medicare patients at the highest therapy reimbursement level, but RehabCare then provided less therapy to those same patients outside the assessment reference periods, when the facilities were not required to report to Medicare the amount of provided therapy, according to the U.S. Attorney’s Office.

The settlement resolves the allegations, according to U.S. Attorney Carmen M. Ortiz.

“This settlement is part of the government’s continuing effort to ensure that the provision of care in skilled nursing facilities is based on patients’ clinical needs and not tied to the financial targets of the companies providing their care,” Ortiz said in a statement. “To its credit, ArchCare cooperated with the government’s investigation and took steps to address the issues that were revealed during the investigation.”

The government took ArchCare’s cooperation and its current practices into account in reaching the resolution.

ArchCare operates Terence Cardinal Cooke Health Care Center in New York City and Ferncliff Nursing Home in Rhinebeck, New York, and it previously operated Kateri Residence in New York City.

ArchCare’s subcontractor is Physical and Occupational Rehabilitation Therapy and Speech-Pathology Services, PLLC, an affiliate of RehabCare Group East, Inc., and Kindred Healthcare, Inc., according to the U.S. Attorney’s Office.

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This settlement also resolves allegations that ArchCare failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy, rather than using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs; planning the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; arbitrarily shifting the number of minutes of planned therapy between different therapy disciplines to ensure targeted reimbursement levels were achieved; reporting that time spent on initial evaluations was therapy time in order to avoid the Medicare prohibition on counting initial evaluation time as reimbursable therapy time; reporting that time spent providing unskilled palliative care was time spent on reimbursable skilled therapy; and reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.

Twitter: @SusanMorseHFN