A therapy provider will pay $8.4 million after being accused of providing unnecessary services at skilled nursing facilities in order to increase their Medicare reimbursements.
The Department of Justice and U.S. Attorney’s Office for the District of New Jersey announced the settlement agreement with Select Medical Corporation and Encore GC Acquisition LLL on Friday.
The agreement resolves allegations that the contract rehabilitation therapy providers violated False Claims Act while they were contracted with 12 SNFs in New York and New Jersey. From Jan. 1, 2010 to March 31, 2016, Select Medical Rehabilitation Services Inc. allegedly encouraged and provided medically unnecessary, unreasonable and unskilled therapy services to residents without taking into account their individual clinical needs, federal officials said.
Select Medical Corporation, which was the parent company of Select Medical Rehabilitation Services at the time, on Sunday declined comment on the settlement agreement to McKnight’s Long-Term Care News. Encore Rehabilitation Services acquired Select Medical Rehabilitation Services in March 2016.
A spokesman for Encore on Tuesday said the payments required under the terms of the settlement agreement with the government were not made by Encore or any of its affiliated entities. He added there have been no administrative obligations or requirements imposed upon Encore in connection with the settlement.
“For several years, Encore has cooperated with a government inquiry related to alleged conduct by Select and SMRS. The conduct at issue concerned 12 facilities serviced by SMRS and occurred prior to Encore’s acquisition of SMRS,” the spokesman told McKnight’s.
“While Encore had no involvement in the alleged conduct, we have agreed to enter into a settlement with the government – along with Select – to resolve the matter, as we are considered the ‘successor-in-interest’ to SMRS due to the acquisition. The payments required under the terms of the settlement agreement with the government were not made by Encore or any of our affiliated entities, and there have been no administrative obligations or requirements imposed upon Encore in connection with the settlement of the matter,” the spokesman said.
The Encore spokesman added the company remains fully committed to complying with industry laws and regulations, as well as closely adhering to its own “rigorous Code of Conduct that guides our business practices, decisions and behaviors.” The company pledged to continue providing comprehensive, quality care and service to our patients and dedicated customers.
“Today’s settlement reflects our commitment to protect patients and taxpayers by ensuring that the care provided to Medicare beneficiaries is dictated by their individual clinical needs and not by a provider’s financial interests,” Brian Boynton, acting assistant attorney general in the DOJ’s Civil Division, said in a statement.
“Contract rehabilitation therapy companies, like other healthcare providers, will be held accountable if they knowingly provide patients with unnecessary services that waste taxpayer dollars,” he added.
This story has been updated to included comment from Encore.