California-headquartered Longwood Management Corporation and 27 affiliates will pay $16.7 million to resolve allegations that they billed Medicare for unnecessary services in violation of the False Claims Act.
According to U.S. Attorney Nick Hanna, Longwood “pressured therapists to provide additional, unnecessary services.” The company relied on revenue from Medicare, and it allegedly set very high targets for it on its business plan. Its rehabilitation therapists were routinely pressured to generate higher Medicare billings, prosecutors said. The U.S. Attorney for the Central District of California emphasized “the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers.”
The alleged misconduct was exposed by a lawsuit filed by Judy Boyce, Benjamin Monsod, and Keith Pennetti, who will now share a $3 million whistleblower award. The complaint was filed under the False Claims Act, which enables whistleblowers to receive up to 30 percent of any recoveries resulting from their information.
There is a fixed daily rate for Medicare reimbursements for rehabilitation services provided by skilled nursing facilities. Suppose a patient needs at least 720 minutes of rehabilitation therapy from two different disciplines and requires one of them at least five days per week. In that case, this triggers the highest level of Medicare reimbursements, known as "Ultra high."
Boyce, Monsod, and Pennetti alleged that by establishing Medicare revenue targets, Longwood pressured rehabilitation therapists to bill for a large percentage of patients at the Ultra high level, regardless of their therapy needs.
The government investigation found evidence of inappropriate billings spanning nearly eight years. The alleged violations took place between 2006 and 2014 at a large number of skilled nursing facilities controlled by Longwood, including Sherman Oaks Health & Rehab Center, Sunnyview Care Center, Western Convalescent Hospital Alameda Care Center, Live Oak Rehabilitation Center, View Park Convalescent Center, Monterey Care Center, Intercommunity Healthcare Center, Montrose Healthcare Center, Burlington Convalescent Hospital, Colonial Care Center, Green Acres Lodge, Longwood Manor Convalescent Hospital, West Hills Health & Rehab Center, Crenshaw Nursing Home, Laurel Convalescent Hospital, Pico Rivera Healthcare Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Park Anaheim Healthcare Center, Imperial Care Center, Chino Valley Rehabilitation Center LLC, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital, Imperial Crest Health Care Center, Covina Rehabilitation Center, and San Gabriel Convalescent Center.
To prevent future violations, Longwood has entered a Corporate Integrity Agreement with the Department of Health and Human Services (“HHS”). Under its terms, over the next five years, an independent consultant will review the appropriateness of the company's Medicare billings on an annual basis. A spokesperson for the HHS said in a statement that the compliance agreement was designed to "monitor claims to Medicare and prevent submission of false claims in the future.”
The initial whistleblower lawsuit was filed by Keith Pennetti, who is now Director of Operations for California at RPM Rehab, a position he has held since 2012. Judy Boyce and Benjamin Monsod joined him as relators in the federal government's suit against Longwood Management and its affiliates Aegis Therapies, and GGNSC Holdings.
As soon as you suspect wrongdoing, contact a whistleblower lawyer immediately; one that has years of specialist whistleblower experience. At Hochfelsen & Kani, we will help you navigate company policies and laws.
To find out how we can help you report fraud and collect your cash award, please contact our Orange County whistleblower litigation attorneys today: