Good news for whistleblowers!  McKnight’s had an incredible story about a whistleblower case that resulted from comments made during a therapy provider’s public conference call in 2006.  An audience member became suspicious, investigated the situation, found fraud, and then filed a whistleblower lawsuit.   Remarks about a “therapist recruiting fee” on the public call did not sound right to Mark Essling, CEO of Health Dimensions Rehabilitation Inc..  Essling brought a False Claims Act lawsuit after spending about a year investigating the fees

The whistleblower filed against RehabCare who hosted the 2006 call.  He alleged that RehabCare overbilled Medicare and Medicaid and paid more than $10 million in kickbacks after taking over therapy at Missouri nursing homes.  Kindred Healthcare has owned RehabCare since 2011.

RehabCare argued that Essling should not qualify as a whistleblower because he based his suit on publicly available information. Only individuals identified by the False Claims Act, such as an attorney general, can sue a company based on public information. The defendants asked the judge to remove Essling from the action, which would then have proceeded with the government as plaintiff. His removal would have protected RehabCare from potentially paying Essling’s attorney fees.

Judge Audrey G. Fleissig denied RehabCare’s motion in a May 20 ruling. The “essential elements” of a fraud must be exposed publicly to trigger the public disclosure bar, and the government would not have understood this alleged fraud based only on RehabCare’s public disclosures, Fleissing wrote. Because Essling’s analysis of the information was needed to bring the case, he can remain a whistleblower plaintiff, the judge ruled.

McKnight’s reported thatTennessee-based nursing home operator Grace Healthcare LLC will pay the federal government more than $2.7 million, settling charges that Grace violated the False Claims Act by billing Medicare for unnecessary rehabilitation therapy.   A whistleblower said 10 Grace-operated skilled nursing facilities billed for unnecessary and unreasonable physical, occupational and speech therapy to meet the corporation’s reimbursement goals from 2007 to 2011.

The government proved that Grace’s billing was an example of “waste and abuse” driven by “financial considerations,” said U.S. Attorney for the Eastern District of Tennessee Bill Killian.  Grace will enter into a Corporate Integrity Agreement regarding its therapy services as part of the settlement. The former Grace employee received $405,000 under the settlement agreement.


Court documents unsealed today show that the federal government is investigating Life Care Centers of America, whose headquarters is in Cleveland, Tenn., for a suspected nationwide Medicare fraud scheme.  The documents allege that the company, which has more than 200 facilities in 28 states, has instituted a policy of Medicare up-coding and unnecessary therapy treatments since at least 2006.  Court documents show Medicare paid the company $4.2 billion in payments from 2006 to 2011.  The whistleblower lawsuits were filed separately in 2008 by former employees, one in Florida, the other in Tennessee.  See above article at The Times Free Press.

The Sun Chronicle reported more details including that the nursing home chain defrauded Medicare by billing at high rates for services that were not covered, not medically necessary and not skilled care.  The allegations against Life Care follow a 2010 report by the U.S. Inspector General’s Office critical of billing by skilled nursing care facilities.



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The nursing home continues to profit despite their complaints about adjustments in reimbursements from Medicare and Medicaid.  Kindred Healthcare’s RehabCare contract therapy division is holding steady.  Kindred reported overall consolidated revenues up by 1% to $1.5 billion and operating income at close to $200 million. The company acquired RehabCare in June 2011.  Kindred’s hospital division revenues grew 4%, and the company continues to dig into home health and hospice, with its recent IntegraCare acquisition adding $71 million in annual revenue. 

Skilled Healthcare reported revenue of $216.6 million, beating expectations. Ventas REIT also had a strong third quarter with net income up 8.7%. That was largely a result of $1.7 billion in acquisitions in 2012.


Des Moines Register reported the lawsuit between Bethany Lutheran Home and Kindred Healthcare related to Medicare fraud and “windfall profits” through siphoning of funds meant for resident care.  Bethany accuses Kindred of bilking taxpayers out of $3 million.  Last summer, RehabCare Group merged with, and was taken over by, Kindred Healthcare of Kentucky. Kindred has described itself as the nation’s largest provider of contracted therapy, serving almost 2,000 nursing homes and other care providers.

“The lawsuit stems from action taken last fall by federal fraud investigators. In October, the U.S. attorney’s office in the Southern District of Iowa alleged that after Bethany Lutheran Home hired RehabCare Group to handle residents’ physical, occupational and speech therapy, the home’s billings to Medicare for those services skyrocketed. Specifically, the prosecutors alleged that the number of residents who supposedly were receiving an “ultra high” level of rehabilitation service — which is billed to Medicare at the highest possible rate — underwent a “seismic shift” in 2006 once RehabCare Group was hired.”  RehabCare Group had assured Bethany Home during contract negotiations that the home’s revenue from rehabilitation services would double if the two did business together.

The prosecutors said that not one of the home’s residents received a single day of “ultra high” therapy care in 2004. But two years later, the home billed Medicare for 1,685 days of “ultra high” care — a rate that was seven times that of the average Iowa nursing home. That increase in billings continued through 2009, the prosecutors said, producing “windfall profits” for Bethany Lutheran Home.

The investigators discovered that the therapy that was being billed didn’t conform to the residents’ actual medical needs. For example, Medicare paid out $20,391 for physical therapy allegedly received by one 81–year-old woman after she underwent surgery for appendicitis. Investigators examined the woman’s file and found that she was largely independent when admitted to the home and had the same muscle strength when she was discharged 61 days later.


The New American Magazine reported on the positive benefits that animal-visit therapy can have on nursing home residents.  For residents that will have to spend a significant amount of time in a nursing home it is important for the facility to feel as much like home as possible. This means allowing family members to visit as much as possible. Jamie Snow the Assistant Director of Child Life and Social Work at Texas Children’s Hospital explains, “When there is a patient in the hospital for a significant amount of time, we think it is important to have their entire family here. And some people consider pets family members.”

Many health care professionals agree that good health is not just dependent on medical care but also depends on social, psychological, and behavioral aspects. Research has found that behavior such as the loving and sympathetic connection between humans and domesticated animals can have many positive health benefits.

The article explains, “For many years now it has been recognized that letting nursing home patients hold and pet cats and dogs has been shown to have strong therapeutic effects upon the patients.”

In the past, many people have been leery of the potential hygiene issues that pets could pose in a health care facility.  However, experts have established safe protocols to make pet therapy visits safe for nursing home residents and the animals.  Precautions such as ensuring the animal has current vaccines, regular baths, and preforming a “behavior check” to make sure the animal has the right temperament can make animal therapy safe for nursing homes.

Jean Pottinger, an infection prevention expert from the University of Iowa Healthcare, explained the safety of pet therapy saying, “There has never been an instance of a pet bringing any infection into the hospital.”

The nursing home industry manipulated Medicare rules aimed to reduce overbilling and collected an additional $2.1 billion in added Medicare payments in the first half of this year according to a recent government report.  The rule prevents nursing homes from assigning one therapist to treat groups of patients simultaneously and billing each individually for the total time of the session.  Medicare administrators prohibited the practice where nursing homes bill for concurrent therapy, in which workers simultaneously treat 10 or more patients recovering from strokes or hip replacement surgeries.

Operators responded by reclassifying patients in smaller group settings and still billed the government as if therapy was provided on a one-on-one basis.  Circumventing the rule change lets operators bill more patients at the highest rate, the report said.  Nursing homes “have a financial incentive to choose group therapy.’’

Of course, the American Health Care Association, the Washington lobbying group for for-profit nursing homes thinks they should continue to overbill tax payers.  Leading for-profit nursing home chains include Kindred of Louisville, Ky.; Skilled Healthcare of Foothill Ranch, Calif.; Carlyle Group’s HCR ManorCare Inc. in Toledo, Ohio; and Sun Healthcare, based in Irvine, Calif.   See article from here.

A Bloomberg article states that enforcing the new rule will lead to $3.8 billion in Medicare savings.

Here is a white paper on the importance of appropriate restorative nursing programs for residents’ quality of life. Author Barbara Acello is an independent nurse consultant and educator in Denton, Texas.

The paper discusses the background and importance of restorative nursing programs.
"Restorative nursing is more important now than it has ever been. The Omnibus Budget Reconciliation Act of 1987 (OBRA) required skilled nursing facilities to identify and act on risk factors to prevent functional decline in residents.  OBRA included the legislative mandate for facilities to allow only medically unavoidable declines. Facilities are expected to plan care that will delay any decline in function in the residents. When the Resource Utilization Groups (RUGs) were
initiated, restorative nursing programs became part of Medicare reimbursement. The Resident Assessment Instrument (RAI) Manual for 2010 defines restorative nursing as “nursing interventions that promote the resident’s ability to adapt and adjust to living as independently and safely as is possible” (CMS, 2010).

The RAI Manual instructs facilities to begin restorative nursing programs when a resident is discharged from therapy, at admission if the resident has restorative needs and is not a therapy candidate, and at any time during the resident’s stay that restorative needs arise. In March of 2011, the National Quality Forum released 21 measures for public reporting and quality improvement that will be used at the Nursing Home Compare website. Both short-stay and long-term residents are included in this data.

Restorative nursing programs affect resident quality of life by allowing the resident to be as independent as possible. Restorative nursing programs also affect reimbursement, survey, and resident/family facility choice.  Restorative nursing is basically person-centered, whole-person
nursing care; the kind of nursing that we practice every time we care for a resident. The difference in a formalized restorative nursing program is that activities of daily living are considered therapeutic modalities. Nursing assistants are trained to instruct, encourage, guide, and assist residents to perform self-care skills with as much independence as possible. Quality of life is a natural outcome of restorative care.

Functional decline, on the other hand, can lead to depression, withdrawal, social isolation, and complications of immobility, such as incontinence and pressure ulcers. Functional decline has
been described as the “main determinant of quality of life, cost of care, and vital prognosis” (Baztan, 2009). The OBRA legislation and Medicare recognized the importance of preventing decline and created both a legislative and financial incentive to provide restorative nursing programs in skilled nursing facilities.

Regulations drive reimbursement, a fact of life in long-term care. Reimbursement dictates the amount of resources available for resident care and services. A well-managed restorative nursing program can bring profit to the facility’s bottom line. This is one of the ways that good care creates
resources for more good care – a positive cycle.

For the program to be profitable, attention to, and support for, the restorative nursing must come from the top. The facility administrator, director of nurses, and therapy director must be on board. A facility-wide culture of restorative nursing must be present. If not, the “helpful” housekeeper who does a task for the resident instead of with the resident will undermine the program.

Nurses, not physicians or therapists, order restorative nursing programs. Therapists work with nurses as consultants.  However, restorative nursing is not rehabilitation therapy. Rehab and restorative nursing are complements to one another, but not the same.  Restorative nursing, on the other hand, focuses on maintaining function in a long-term, ongoing process.   Improvement is hoped for but not required.  Restorative nursing bases treatment on restoring or compensating for skills lost through chronic disease, disuse, or other physiological factors.

CMS believes strongly that restorative nursing programs are appropriate for almost every resident. Quoting from the RAI Manual:
Most residents are candidates for nursing-based rehabilitative care that focuses on maintaining and expanding selfinvolvement in ADLs.

In February, Kindred Healthcare Inc., a Louisville-based senior living/health-care company, acquired Rehab Care Group of St. Louis, a leading care provider that operates long-term acute-care hospitals and inpatient rehabilitation facilities, in addition to providing contract rehabilitation services at hospitals and nursing and assisted-living facilities it does not own.

Kindred Healthcare Inc. is now the largest post-acute health-care services company in the United States. The price tag for the acquisition was $900 million in cash and stock.  With this merger, Kindred will have 118 long-term acute-care hospitals; 226 nursing and rehabilitation centers; 121 inpatient rehabilitation facilities; and 1,808 hospital, nursing center and assisted-living rehabilitation therapy service contracts in 46 states.  It will, in essence, become a "one-stop shop" on the continuum of care, with patients moving from a hospital to a longer-term facility for further care or for rehabilitation.

As they merge, Kindred and Rehab Care will face other questions, such as how to provide — and how to define — quality of care.



The Asheville Citizen Times reported that Senior Care Group Inc. of Tampa which owns nursing homes in Western North Carolina has agreed to pay nearly $1 million to settle federal allegations that it defrauded the Medicare program following a multi-year investigation by the FBI and U.S. Department of Health and Human Services.  Investigators found that Senior Care’s rehabilitation contractor, Evergreen Rehabilitation LLC of Kentucky, put intense management pressure on its employees to maximize billing. Evergreen billed for unnecessary services and forwarded the billings to Senior Care, which then wrongfully billed those costs to Medicare.

Tompkins said the investigation began when the government received information about billing fraud at Sunrise Rehabilitation Center in the McDowell County community of Nebo and Brookside Rehabilitation Center in Burnsville.

Investigators determined that Evergreen routinely instructed its employees to “get their numbers up” or else be fired, Tompkins said. They also found that Senior Care failed to adequately supervise its contractor.

As a condition of the settlement, Senior Care was required to enter into a Corporate Integrity Agreement with the government under which it will be monitored for five years.