Strauss Ventures, doing business as Grand Healthcare System, and 12 skilled nursing facilities will pay $21.3 million to settle allegations they billed federal healthcare programs for services that were unreasonable, unnecessary, unskilled or that did not occur as billed.
Six things to know:
1. From Jan. 1, 2014 to Sept. 30, 2019, Valley Stream, N.Y.-based Grand Healthcare allegedly submitted false claims for rehab therapy for residents at 12 SNFs owned by Strauss. During this period, Medicare Part A and Tricare paid for services at rates that varied based on the number of minutes of skilled rehab therapy provided.
2. Some former management employees implemented quotas that the 12 facilities were expected to hit, including quotas relating to beneficiaries' lengths of stay and to the percentage of beneficiaries billed at the highest reimbursement rate.
3. To meet quotas, facilities often scheduled patients for therapy without consideration of what was reasonable and necessary based on each patients' clinical condition. Grand Healthcare also directed that no more than three patients be discharged from any facility per week and that no Medicare Part A patients should be discharged from rehab therapy unless it had been discussed with corporate leaders. The company said this resulted in some Medicare beneficiaries "staying on therapy longer than was reasonable and medically necessary," according to court documents.
4. The settlement also resolves allegations that Grand Healthcare submitted false claims to Medicaid for services provided at its Pawling, N.Y., nursing home between Jan. 1, 2016, and June 30, 2021. These claims were allegedly false because the reimbursement rate was inflated by data inaccurately reflecting the degree of care, including rehab therapy services, needed by Medicaid patients there.
5. Grand Healthcare has entered into a five-year corporate integrity agreement with HHS that requires an independent organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
6. The settlement resolves a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Stacey Rosenberger and Kelley Retig, former rehab therapy providers the the company. The whistleblowers will receive more than $4 million of the settlement proceeds.
The settlement is not an admission of wrongdoing by Grand Healthcare.