False Claims judge rejects HCR ManorCare

A federal court has rejected HCR ManorCare's claim that alleged overbilling for therapy was an example of clinical disagreements over what constitutes a reasonable level of therapy.

As a result, a False Claims Act case filed in the Eastern District of Virginia against the nursing home giant entered the discovery phase in September. 

In making his ruling, U.S. Judge Claude M. Hilton said similar cases he has presided over have involved criminal prosecution, adding, “It seems to me that you're getting on to a summary judgment kind of issue based on the evidence that comes in, or we're going to have to try it and see who's right,” according to a court transcript cited by plaintiff's attorney Jeffrey J. Downey.

Former HCR ManorCare occupational therapist Christine Ribik initiated the original whistleblower complaint. She alleged that the company artificially boosted the number of patients who received Ultra High levels of therapy. The government joined Ribik's case in April, claiming company executives “participated in the fraud scheme,” Downey said.

HCR ManorCare declined to comment on the recent ruling. However, when federal prosecutors joined the lawsuit, company officials called it “unjust,” and said in a statement they would “vigorously” defend the company in court.

“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,” the statement read.

The plaintiffs said that ManorCare data reveals it billed Medicare at the Ultra High reimbursement level for 38.8% of all rehab days billed in October 2006, a level that had soared to 80.3% by November 2009.