ArchCare to pay $3.5M to settle rehab billing complaint

A New York nursing home chain agreed Monday to pay $3.5 million to settle government allegations it failed to prevent a rehab subcontractor from overbilling Medicare for therapy.

According to the U.S. Attorney's office, three skilled nursing facilities operated by Catholic Health Care System (doing business as ArchCare) submitted inflated Medicare claims “based on either the provision of unreasonable or unnecessary rehabilitation therapy, or false reports of therapy being delivered,” according to the Justice Department.

The services were allegedly provided prior to October 1, 2011, by ArchCare's subcontractor, Physical and Occupational Rehabilitation Therapy and Speech-Pathology Services, PLLC, an affiliate of RehabCare Group East, Inc. (RehabCare), and Kindred Healthcare, Inc.

Government attorneys said ArchCare failed 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."

United States Attorney Carmen M. Ortiz, who credited ArchCare for its cooperation during the investigation, noted that the settlement was “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.”

The comprehensive settlement between the federal government and defendants also put to rest a series of other allegations that ArchCare failed to curb other inflationary reimbursement practices by RehabCare, the Justice Department added. For its part, ArchCare said it remains committed to the highest quality care for its residents and cooperated voluntarily with the government.

“During its investigation of a third-party therapy vendor with which ArchCare contracted at some facilities, the government determined that in certain situations the contractor's practices may have resulted in ArchCare receiving overpayments from Medicare for therapy services our residents received," spokesman Jon Goldberg told McKnight's

Goldberg said the company has “added additional oversight to our already comprehensive compliance program, and have taken other measures as well to ensure to the best of our ability that such overpayments do not happen in the future. Integrity is and always will be a guiding value at ArchCare, and we are grateful for the government's efforts in connection with this matter.”

He added ArchCare is transitioning to a new therapy vendor.