On July 10, the U.S. Department of Justice announced that Strauss Ventures LLC, doing business as The Grand Health Care System, and 12 affiliated skilled nursing facilities (collectively, the Grand) agreed to pay $21.3 million to settle accusations that they violated the False Claims Act by knowingly billing federal health care programs for therapy treatments that were unreasonable, unnecessary, unskilled or that did not occur as billed.
The settlement stems from a qui tam whistleblower suit filed by Stacey Rosenberger and Kelley Retig, former providers of rehabilitation therapy at the Grand. The whistleblowers will receive approximately $4,047,000 of the settlement earnings.
The government alleges the Grand intentionally made false claims for rehabilitation therapy for residents at 12 establishments that Strauss Ventures owned and maintained between January 1, 2014, and September 30, 2019.
Medicare Part A, which covers hospital stays and, in certain cases, skilled nursing facility care and TRICARE, the federal health care program for the Department of Defense, paid for these services during this time at different rates depending on the number of minutes of skilled rehabilitation therapy given.
According to the Government, “The Grand allegedly submitted bills where the reimbursement claimed was based on providing more therapy than was reasonable and necessary, or in some cases where the therapists did not provide the amount of therapy reported.”
The settlement has resolved previous allegations that the Grand submitted false claims to Medicaid for services rendered at its Pawling, New York, nursing home between Jan. 1, 2016, and June 30, 2021. Additionally, the Grand and the Department of Health and Human Services Office of Inspector General (HHS-OIG) have entered into a five-year Corporate Integrity Agreement that mandates an annual evaluation by an independent review organization of the appropriateness and medical necessity of therapy services billed to Medicare.
“As a part of this settlement, the defendants acknowledged that they obtained funds from the Medicare program to which they were not entitled,” said Special Agent in Charge Naomi Gruchacz of HHS-OIG. “Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”
The False Claims Act’s qui tam provisions enable private citizens and private parties to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act