A legal settlement involving two long-term care companies accused of not sufficiently controlling their contracted therapy provider’s billing practices has created anxieties among skilled nursing operators.

The Department of Justice announced the $3.75 million settlement in mid-September. It said an Iowa-based nursing home management company and a California skilled nursing facility did not stop the alleged practices of therapy provider RehabCare Group East Inc., such as upcoding patients into the highest level of therapy without evaluating actual clinical needs.

“When a facility contracts with an outside rehabilitation therapy provider, the facility has a continuing responsibility to ensure that the provider is not engaged in conduct that causes the submission of false claims to Medicare,” stated U.S. Attorney Carmen M. Ortiz for the District of Massachusetts.

Defendants Life Care Services and CoreCare did not admit any wrongdoing under the settlement, but provider advocates nationally have expressed concerns about the chain of accountability outlined by DOJ.