Judge denies motion to dismiss HCR ManorCare false claims suit

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A government complaint alleging HCR ManorCare overbilled Medicare for rehabilitation services is a viable cause of action under the False Claims Act, a judge has ruled.

The original whistleblower complaint, filed by a then-HCR ManorCare occupational therapist, asserts ManorCare increased the number of patients who received Ultra High levels of therapy, despite Ultra High therapy being neither “reasonable or necessary” for their medical needs. The government intervened in the case in April.

In its motion to dismiss, ManorCare argued the alleged overbilling involved clinical disagreements over what constitutes a reasonable level of therapy. The U.S. District for the Eastern District of Virginia allowed the case to move into the discovery phase earlier this month.

ManorCare declined to comment on the recent ruling. However, when the government joined the case, ManorCare called the lawsuit “unjust,” and said it would “vigorously” defend itself 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 Wall Street Journal released a report on Ultra High billing last month, noting that the percent of Medicare billing for Ultra High therapy in nursing homes increased from 7% in 2002 to 54% in 2013.