Manhattan US Attorney Suits Eleven Qualified Nursing Facilities and Their Management Company, Owner, and Senior Employee for Fraudulently Billing Medicare for Unnecessary Services | USAO-SDNY


Audrey Strauss, United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in charge of the New York regional office of the United States Department of Health and Human Services, Office of the Inspector General (” HHS-OIG “), today announced that the United States has filed a civil healthcare fraud lawsuit against ISSAC LAUFER, TAMI WHITNEY, MONTCLAIR CARE CENTER, INC., EAST ROCKAWAY CENTER LLC, EXCEL AT WOODBURY FOR REHABILITATION AND NURSING, LLC, LONG ISLAND CARE CENTER INC., TREETOPS REHABILITATION & CARE CENTER LLC, SUTTON PARK CENTER FOR NURSING & REHABILITATION, LLC, SUFFOLK RESTORATIVE THERAPY & NURSING, LLC, OASIS REHABILITATION, LLC, FOR NURSING & REHABILITATION, LLC, SUFFOLK RESTORATIVE THERAPY & NURSING, LLC, OASIS REHABILITATION, LLC, FOR NURSING & REHABILITATION CARE CENTER, INC., SURGE REHABILITATION, LLC REHABILITATION & NURSING LLC and PARAGON MANAGEMENT SNF LLC (collectively the “defendants”). The lawsuit seeks damages and civil penalties under the False Claims Act for billing f rudely Medicare for unreasonable and unnecessary services provided to patients at eleven skilled nursing facilities located in New York City (the “Facilities”).

The complaint alleges that, during the period from at least January 2010 to September 2019, the defendants systematically kept patients in facilities longer than necessary in order to maximize the amount billed to Medicare for patient stays. During these stays, facilities routinely subject patients to higher levels of rehabilitative therapy than necessary based on their actual clinical needs in order to bill Medicare at the highest rate. ISSAC LAUFER, who co-owns ten of the eleven facilities and operates the eleven facilities through PARAGON MANAGEMENT SNF LLC, and TAMI WHITNEY, the rehabilitation services coordinator for the facilities, instructed and lobbied staff to qu ‘he engages in these fraudulent practices. As a result, according to the complaint, the facilities submitted or caused to be submitted false claims for payment for rehabilitation services that were unreasonable and unnecessary, or in some cases, did not even involve the provision of qualified therapy.

US lawyer Audrey Strauss said: “As alleged, ISSAC LAUFER, TAMI WHITNEY and ISSAC LAUFER Qualified Nursing Facilities possess and / or operate priority benefits over their obligation to focus on the actual medical needs of their patients. patients. In blatant violation of applicable regulations, the defendants fraudulently inflated their Medicare reimbursements by unnecessarily extending patient stays and billing for therapy that offered little or no clinical benefit. This office will vigorously continue to prosecute businesses and individuals who engage in these practices at the expense of the public revenue system. “

HHS-OIG Special Agent Scott J. Lampert said, “The Medicare program is designed to protect both beneficiaries and taxpayers. When health care providers charge for unnecessary or inappropriate services, patient care is threatened and the financial integrity of our federal health care system is compromised. Working with our law enforcement partners, we will continue to ensure that healthcare providers are held accountable for their billing practices and the services they provide. ”

The following allegations are based on the complaint filed today in Federal Court in White Plains:

The eleven respondent facilities are qualified nursing facilities located in the New York metropolitan area. LAUFER is co-owner of ten of the eleven facilities and operates the eleven facilities through PARAGON MANAGEMENT SNF LLC. WHITNEY is the rehabilitation services coordinator for the facilities and, as such, is involved in decisions regarding the delivery and billing of rehabilitation services.

From at least January 2010 through September 2019, the defendants systematically kept Medicare patients in facilities longer than reasonable or necessary, and subjected those patients to higher levels of rehabilitative therapy than reasonable or necessary. These practices were aimed at increasing the amounts billed to Medicare beyond what was justified based on patients’ clinical needs. In some cases, facilities have gone so far as to intentionally limit patient progress in order to create the appearance of a continuing need for services. In one case, WHITNEY told LAUFER that facilities should not allow patients to go to the bathroom on their own because they “would then think they are ready to go home.”

LAUFER and WHITNEY ordered the facilities to engage in this conduct. Specifically, WHITNEY carefully tracked the length of stay for each Medicare patient and staff expected in facilities to justify scheduled discharges before the patient’s stay reached 100 days – the maximum compensable by Medicare. Working with facility management, WHITNEY devised strategies to extend patients’ stays, including giving them unnecessary tests to assess their balance when they were ready to go out in order to create an excuse to extend their stay. WHITNEY reported on the success of these “discharge prevention” measures to Laufer, noting both areas where these measures have been successful and where facilities have had to work harder to extend patient stays, such as hospital stays. “younger and smarter” or “raised” patients. level. ”LAUFER, in turn, received daily updates from facilities reporting the number of Medicare patients who had been discharged and, on several occasions, asked WHITNEY to limit discharges. LAUFER gave these instructions without no information on the clinical needs of patients and clarified that they were designed to increase income.

WHITNEY, with the knowledge of LAUFER, also called on facilities to provide virtually all Medicare patients with “Ultra High” treatment –that is to say, highest billing level, regardless of patients’ needs or whether, due to their conditions, they could benefit from this intense therapy. To qualify for the Ultra High level, a patient must receive at least 720 minutes of qualified therapy services (that is to say, physiotherapy, occupational therapy or speech therapy requiring the services of a qualified therapist) per week. Employees understood that there was virtually no wiggle room when it came to determining how much rehabilitation therapy a patient would receive. The pressure to provide this level of therapy in turn led establishments to bill for services that did not actually constitute qualified therapy and therefore were not eligible for Medicare reimbursement (such as the simple removal of limbs from patients with severe medical conditions. cognitive disorders or assistance with self-care tasks).

LAUFER and WHITNEY’s efforts to keep Medicare patients in institutions for as close to 100 days as possible and to provide almost all patients, regardless of need, with very high standard of therapy have been successful. During the relevant period, facilities were significant outliers, relative to other skilled nursing facilities, in median length of stay for Medicare patients and levels of rehabilitative therapy.

These practices have led facilities to submit claims to Medicare for rehabilitative therapy that were unreasonable or necessary, that were billed at a higher rate than expected, or that did not involve the provision of qualified services, and for example. therefore, were not eligible for payment. In addition, facilities made or used false statements and registrations that were material to false claims made to Medicare for payment for unreasonable, unnecessary, or unqualified rehabilitation therapy.

The government intervened in a private whistleblower lawsuit before the Honorable Cathy Seibel that had previously been filed under seal under the False Claims Act.

Ms Strauss thanked the HHS-OIG for their help with the file.

The case is handled by the Civil Fraud Unit of the Office. US Deputy Prosecutors Jacob Bergman and Rachael Doud are in charge of the case.


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