On July 13, the U.S. Department of Justice (DOJ) announced the settlement of a False Claims Act lawsuit against Longwood Management Corporation (Longwood). Longwood, which manages 27 nursing and rehabilitation facilities in California, agreed to pay $16.7 million to resolve allegations brought under the FCA’s qui tam provisions that it routinely charged Medicare for unreasonable or unnecessary therapy and services for patients.
The government alleged that between 2006 and 2014, Longwood created plans to systematically increase its Medicare bookings without considering the care that patients needed. Longwood allegedly billed Medicare for the highest level of care available, known as Ultra High Care, for patients who only needed lower levels of care. According to the government’s claims, Longwood created pre-planned targets for Medicare revenue, which it passed on to therapists, encouraging them to upgrade patient care to higher levels of care.
Categorizing a high proportion of patients for Ultra High Care was the only way to meet these goals. Longwood and its subsidiaries will enter into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, which will require a higher level of oversight over its care facilities and business practices.
The whistleblowers who initiated this case, Judy Boyce, Benjamin Monsod, and Keith Pennetti, will receive a total reward of just over $3 million. The False Claims Act allows private citizens to bring claims on behalf of the federal and receive whistleblower rewards, 15 to 30% of the total recovered funds, for their disclosures. This settlement will help ensure the safety of our healthcare system and encourage other management corporations to steer clear of exploitative strategies.
