Kentucky-based skilled nursing facility operator Signature HealthCARE will pay $30 million as part of a settlement to resolve allegations that the company violated the False Claims Act by knowingly submitting false claims to Medicare for rehabilitation services that were either not "reasonable, necessary and skilled," the Department of Justice announced
It is also alleged that Signature submitted forged pre-admission certifications of patient need for skilled nursing to Tennessee's Medicaid program. Signature owns and operates roughly 115 skilled nursing facilities, including seven in middle Tennessee.
As part of the resolution, the State of Tennessee will receive a portion of the settlement, the DOJ said.
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"Health care providers who engage in deceptive practices place patients at unnecessary risk and contribute to the financial distress of our federal healthcare programs," said the U.S. Attorney's Office.
According to the DOJ, some of the methods allegedly used to submit claims for inappropriate services included: placing patients in the highest therapy reimbursement level instead of utilizing individual evaluations to determine the correct level of care based on patient need; providing the minimum number of minutes required to bill at a given reimbursement level while discouraging the provision of additional therapy beyond that minimum; and pressuring therapists and patients to complete planned therapy even when patients were ill or declined to participate.
The original lawsuit was filed under the qui tam, or whistleblower provisions of the False Claims Act by former Signature employees Kristi Emerson and LeeAnn Tuesca in federal court in Nashville, Tennessee. Emerson and Tuesca also will receive a portion of the recovered funds.
Signature is not the first health system to be hit with a sizeable settlement over how services are rendered and subsequently billed. In April, Arizona-based Banner Health committed to pay more than $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly admitted patients for inpatient care who could have been treated on an outpatient basis, and then submitted false claims to Medicare for the services, according to the Justice Department.
Earlier this year, San Diego system Scripps Health agreed to a $1.5 million settlement over allegations it violated the False Claims Act by charging federal healthcare programs for physical therapy services billed by therapists that lacked the appropriate billing privileges and were not properly supervised as required by law, the Justice Department announced.
Medicare and TRICARE require that billing privileges go to only enrolled providers. Services from unenrolled providers can be billed as "incident to" the services of an enrolled physician, however, an enrolled physician must directly supervise the services as they are rendered.