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Press Release

Rhode Island Nursing Home Operator and Chief Operating Officer to Pay $2.2 Million to Resolve False Claims Allegations

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – Providence-based skilled nursing facility operator Health Concepts, Ltd., and its Chief Operating Officer, John Gage, have agreed to pay $2.2 million to resolve allegations concerning inflated Medicare claims.

“This settlement is another in a series of resolutions involving inflated Medicare billing at skilled nursing facilities,” said United States Attorney Carmen M. Ortiz.  “We continue our efforts to ensure that the provision of care in nursing facilities is based on patients’ clinical needs rather than the financial interests of the companies providing care.”

“Veterans have sacrificed so much for this country and deserve the very best we can provide, especially during elderly care.  When VA places these veterans in nursing homes, we expect that standard of care to be met. We will continue to investigate any nursing facility that bases their level of care on financial interests rather than the needs of our country’s veterans.  We are proud to have contributed to this multi-agency investigation,” said Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office.

The agreement announced today resolves allegations concerning rehabilitation therapy that Massachusetts-based Therapy Resources Management (TRM) purportedly provided at Health Concepts facilities in Rhode Island.  The settlement resolves allegations that Health Concepts and Mr. Gage failed to take sufficient steps to prevent TRM from engaging in a pattern and practice of fraudulently inflating the reported amounts of therapy provided to Medicare Part A patients in Health Concepts facilities.  Specifically, the facilities submitted bills for therapy that allegedly did not occur as reported, because the therapists were actually conducting initial evaluations when they claimed to be providing therapy, and because the therapists reported therapy time using estimates that often were rounded up from the actual minutes of therapy provided, despite Medicare rules specifically prohibiting the reporting of estimated or rounded numbers of minutes. 

“Health Concepts put its financial gain ahead of the care of their patients,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI will continue to aggressively investigate skilled nursing facilities that inflate their billing and exploit the nation’s healthcare system.”

“Patients and taxpayers rightly expect nothing less than suitable, high-quality health care,” said Phillip M. Coyne, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Service’s Boston Regional Office.  “Providers more concerned with increasing Medicare profits, though, can expect my agency working with law enforcement partners to aggressively investigate and prosecute.”   

HHS Hotline.  The government encourages anyone with information about the practices described above, or similar practices involving rehabilitation therapy in nursing facilities, to contact the Department of Health and Human Services Office of Inspector General Hotline via telephone, 1-800-HHS-TIPS (1-800-447-8477), or in writing via

The case was handled by Assistant U.S. Attorney Gregg Shapiro of Ortiz’s Affirmative Civil Enforcement Unit.

Updated September 28, 2016

Health Care Fraud