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Press Release

Episcopal Ministries to the Aging Inc. to Pay $1.3 Million for Allegedly Causing Submission of Claims for Unreasonable or Unnecessary Rehabilitation Therapy at Skilled Nursing Facility

For Immediate Release
Office of Public Affairs

Episcopal Ministries to the Aging Inc. (EMA), a Maryland not-for-profit corporation that owns skilled nursing facilities, has agreed to pay $1.3 million to the government for submitting false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc. 


“Patient need must dictate the provision of Medicare benefits rather than the fiscal interests of providers,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “ Today’s settlement demonstrates the department’s continued commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services, including those that did not directly provide the unnecessary services.”


The settlement resolves allegations that EMA submitted false claims for rehabilitation therapy at William Hill Manor, a skilled nursing facility EMA owns in Easton, Maryland.  EMA hired RehabCare to provide rehabilitation therapy services to its patients at that facility starting in 2010.  The government alleges that EMA failed to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement to the facilities.  The government contended that among other things the reported therapy did not reflect the lower amounts of therapy generally provided to patients over the course of their stay. 


The settlement further resolves allegations that EMA failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: in lieu of using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs, presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy; providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved and reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided. 


“Patients in our nation’s nursing homes should not be left to wonder whether the therapy they receive is based on their own clinical needs, or is instead tied to the financial targets of the companies providing their care,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts.  “This settlement makes clear that, when a skilled nursing facility contracts with an outside rehabilitation therapy provider, the facility remains responsible for ensuring that its patients are receiving, and Medicare is paying for, reasonable and necessary care.”


This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.


The case was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the U.S. Department of Health and Human Services-Office of the Inspector General and the FBI .  The claims resolved by the settlements are allegations only, and there has been no determination of liability. 

Updated September 15, 2014

Press Release Number: 14-984