Overview
Cohen Milstein represents the whistleblower in a False Claims Act case against a skilled nursing management company, RegalCare, and its affiliated companies and executives, alleging that they systematically overbilled Medicare and Medicaid for years. On February 18, 2025, the United States and the Commonwealth of Massachusetts intervened in the case with the filing of their own complaint.
The whistleblower – and now the government – allege that between 2017 and 2023, RegalCare and the other defendants fraudulently caused the submission of false claims to Medicare and Medicaid for medically unreasonable and unnecessary services to patients of RegalCare’s SNFs. Specifically, it is alleged that Defendants systematically defrauded the government healthcare programs by billing for the highest (and most expensive) level of skilled rehabilitation therapy services provided to patients who did not need those services. During just three years of the relevant period, RegalCare received nearly $260 million in reimbursement for claims that were billed at the highest-level of therapy services.
This scheme has allegedly resulted in many millions of dollars in damages to the Medicare and Medicaid programs.
Important Dates
- On February 18, 2025, the U.S. Attorney’s Office and the Massachusetts Attorney General’s Office intervened and filed a joint complaint the under the federal and Massachusetts False Claims Acts.
Case Background
SNFs are inpatient facilities that provide transitional care to patients following a hospital stay. Federal healthcare programs, including Medicare and Medicaid, reimburse providers for medically reasonable and necessary services rendered to SNF patients. Both the federal and Massachusetts False Claims Acts prohibit individuals or entities from submitting, or causing the submission of, false claims for payment and false statements material to a claim for payment from the respective governments.
Specifically, the allegations in this case are that RegalCare and the other Defendants systematically caused Medicare to be billed for the highest level of skilled rehabilitation therapy services at RegalCare’s SNFs in Massachusetts and Connecticut, despite patients not clinically needing those services. In furtherance of this scheme, it is alleged that RegalCare altered patient records to support billing for such unnecessary services, without having assessed or spoken to the patients, and often without having spoken to clinicians about the changes. It is also alleged that RegalCare improperly directed its third-party billing company to bill Medicare for the highest-level skilled rehabilitation therapy services before the underlying necessary clinical documentation was even complete.
The allegations in this case further claim that Stern, a New York long-term care consulting company, conspired with RegalCare to cause the submission of fraudulent claims to Medicare by scheduling therapists to provide unnecessary services, contrary to patients’ medical needs, to justify billing at the highest-level. When Stern therapists refused to provide services they deemed unnecessary or unreasonable, Stern managers threatened to take employment action against those therapists to pressure them to capitulate.