A New York-based operator and 11 of its skilled nursing facilities are facing a federal healthcare fraud lawsuit after being accused of unnecessarily inflating patient stays and billing Medicare for excessive services to boost reimbursement. 

The Department of Justice on Wednesday announced the lawsuit against Paragon Management SNF LLC, in Glen Cove, NY, part owner Issac Laufer and coordinator of rehabilitation services Tami Whitney on the charges of fraudulently billing Medicare for unreasonable and unnecessary services to residents at 11 facilities in New York.

A request for comment by McKnight’s Long-Term Care News to Paragon was not returned by production deadline. 

Federal officials alleged that from January 2010 through September 2019 the operator “systematically kept patients” at the facilities longer than necessary in order to maximize the amount billed to Medicare for patient stays. 

The agency also accused Laufer and Whitney of instructing and pressuring staff to engage in the practice, and carefully tracked length of stay for each Medicare patient. Officials also said the two expected facility staff to justify discharges scheduled to take place before patient stays approached 100 days, which is the maximum compensable by Medicare. 

“During those stays, the Facilities systematically put patients on higher levels of rehabilitation therapy than necessary based on their actual clinical needs in order to bill Medicare at the highest rate,” the Department of Justice alleged. 

“As a result, according to the complaint, the Facilities submitted, or caused to be submitted, false claims for payment for rehabilitation services that were unreasonable and unnecessary, or in some cases, did not even involve the provision of skilled therapy,” officials said.