CALIFORNIA— 27 skilled nursing facilities, affiliated with Longwood Management Corporation, have agreed to pay $16.7 million in response to allegations of submitting false Medicare claims, as announced by the Department of Justice on July 13.
The false claims made by these facilities include rehabilitation therapy services that were not reasonable or necessary, according to the Department of Justice. All 27 facilities are located in Southern California.
“Longwood’s business plan called for substantial revenue from Medicare, and it pressured therapists to provide additional, unnecessary services when targets were not met,” said United States Attorney Nick Hanna. “This case demonstrates the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers.”
Medicare reimburses skilled nursing facilities at a daily rate based on the skilled therapy and nursing needs of qualifying patients. With how Medicare reimburses, the greater the patient’s needs, the higher the level of Medicare reimbursement. The allegations claim Longwood submitted false claims for rehabilitation therapy in order to increase Medicare billings.
Longwood allegedly knowingly submitted false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents, which are considered the highest level of Medicare reimbursement. Longwood is said to have allegedly pressured therapists into increasing the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue, according to the DOJ.
This fraudulent behavior is said to have occurred from May 1, 2008 through August 1, 2012 at six facilities inlcuding: Alameda Care Center in Burbank, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital in Granada Hills, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center. Aside from those locations, other fraudulent behavior covered in this settlement include the following facilities and dates: January 1, 2006 through October 10, 2014 Burlington Convalescent Hospital in the Westlake District of Los Angeles, Chino Valley Rehabilitation Center LLC, Colonial Care Center in Long Beach, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge in Rosemead, Imperial Care Center in Studio City, Imperial Crest Health Care Center in Hawthorne, Laurel Convalescent Hospital in Fontana, Live Oak Rehabilitation Center in San Gabriel, Longwood Manor Convalescent Hospital in the Mid-City District of Los Angeles, Monterey Care Center in Rosemead, Intercommunity Healthcare Center in Norwalk, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center in the Pico Union District of Los Angeles, View Park Convalescent Center in Baldwin Hills, and Western Convalescent Hospital in the Jefferson Park District of Los Angeles.
Due to this illegal behavior, Longwood has agreed to enter a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) which requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
Whistleblowers who filed allegations will also share in any recovery through this settlement. The whistleblowers were identified as Judy Boyce, Benjamin Monsod, and Keith Pennetti and will collectively receive $3,006,000 of the settlement proceeds.