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Press Release

Spaulding Rehabilitation Hospital North Shore Settles Allegations Of Improper Medicare Billing

For Immediate Release
U.S. Attorney's Office, District of Massachusetts
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BOSTON – On March 12, the United States reached a civil settlement with the Shaughnessy-Kaplan Rehabilitation Hospital (doing business as Spaulding Rehabilitation Hospital for Continuing Medical Care North Shore, or “Spaulding”), resolving allegations that it inappropriately billed Medicare for certain days of patient care in violation of Medicare’s “midnight rule.”

Spaulding has agreed to pay $91,800 to settle the allegations against it. This settlement resolves a civil lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.

The United States contended that Spaulding billed Medicare for days on which patients left the facility before midnight, in violation of the midnight rule which authorizes Medicare reimbursement only when a patient remains in the nursing facility through midnight on a given day. The investigation revealed that, over a period of years, Spaulding would sometimes transfer patients temporarily to the care of other medical providers before midnight, but still bill Medicare for the preceding day’s stay at Spaulding.

“Health care is too important to allow a single dollar to be wasted,” said United States Attorney Carmen M. Ortiz. “We will continue to investigate claims from whistleblowers to ensure that the tax dollars that fund Medicare and Medicaid are properly allocated.”

“Taxpayers and Medicare bargained to pay an honest day’s pay for an honest day’s work,” said Susan Waddell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s Boston region. “But when hospitals violate that bargain – as the government charged here – our office will aggressively investigate and prosecute.”

U.S. Attorney Ortiz and SAC Waddell made the announcement today. The case was handled by Assistant United States Attorney Brian Pérez-Daple of Ortiz’s Affirmative Civil Enforcement Unit.

Updated December 15, 2014