Editor’s Note: This story has been updated with comment from Carlton Skilled Nursing Facility.

Four skilled nursing facilities and a physical therapy center in the Chicago area have agreed to pay $9.7 million to resolve upcoding claims.

Quality Therapy & Consultation worked with four skilled nursing facilities to increase Medicare reimbursements related to RUG scores, authorities said. This resulted in nursing home patients receiving physical, occupational or speech therapy that they did not need or couldn’t benefit from, according to a civil whistleblower lawsuit  filed in U.S. District Court in Chicago.

Per the terms of the settlement, Carlton at the Lake in Chicago will pay $3.63 million; Lakeshore Healthcare in Chicago will pay $2.73 million; Balmoral Home in Chicago will pay $1.17 million, and Ridgeview Rehab in Chicago will pay $1 million. Quality Therapy, formerly in Orland Park, IL, will pay $1.09 million while its owner, Frances Parise, will pay $160,000

Parise also agreed to be excluded from all participation as a provider in Medicare and Medicaid for five years.

Attempts to reach Parise and Quality Therapy were not successful Wednesday, and three of the involved nursing homes did not return calls seeking comment by production deadline. In a statement Thursday, Etan Bleichman, Regional Director of Operations at The
Carlton Skilled Nursing Facility, said the previous operator reached the settlement.

“Carlton Skilled was not a party to this settlement and only commenced operations of the Facility
after the time frame of the U.S. Attorney’s Office’s investigation,” he said. “Additionally, Carlton Skilled no
longer used QTC as the Facility’s therapy provider. As always, the care of our residents of Carlton Skilled is our top priority, and the investigation and settlement by the prior operator of our facility has no impact on our operations or the well-being of our residents.”

Whistleblower Katherine Verhulst, a former occupational therapist for Quality Therapy and Consultation Inc. who filed the original lawsuit in 2014, will receive around $1.9 million.

“This case, like similar False Claims Act cases in the healthcare industry, makes it clear that the government will not tolerate healthcare fraud and that companies risk suffering significant financial penalties,” said Brian J. Markovitz, lead attorney at Joseph Greenwald & Laake. “Our client was very brave to come forward and provide the government with this information.”

McKnight’s Staff Writer Mallory Hackett contributed to this report.