Recently, the Department of Justice intervened in a qui tam case brought by Integra Med Analytics, LLC, in 2017 against eleven skilled nursing facilities in New York, their management company, owner, and a senior employee for a decade of fraudulently billing Medicare for unnecessary services.
The lawsuit, developed by Integra through an investigation and data analysis of the facilities’ Medicare billing practices, alleges that from at least January 2010, the defendants engaged in significant Medicare fraud by wrongfully extending patient stays and providing unnecessary and unreasonable rehabilitation without regard for patient medical needs.
According to the DOJ, Issac Laufer, who is a part owner of ten of the eleven Facilities and operates all eleven Facilities through Paragon Management SNF LLC, and Tami Whitney, the Coordinator of Rehabilitation Services for the Facilities, instructed and pressured staff to engage in these fraudulent practices.
The practices were designed to increase the amounts billed to Medicare beyond what was justified based on patients’ clinical needs. In some cases, the facilities intentionally limited patients’ progress to create the appearance of a continued need for services. In one instance specifically, Whitney reported to Laufer that the Facilities should not allow patients to go to the bathroom by themselves because they would then “think they are ready to go home.”
Laufer and Whitney’s efforts to keep Medicare patients at the facilities for as close as possible to 100 days and to provide almost all patients irrespective of need with therapy at the Ultra High level, succeeded. During the relevant period, the facilities were significant outliers when compared to other skilled nursing facilities with respect to Medicare patients’ average length of stay and levels of rehabilitation therapy.
The DOJ conducted its own investigation and subsequently filed a complaint-in-intervention alleging that the conduct continued through 2019.
U.S. Attorney Audrey Strauss said, “As alleged, Issac Laufer, Tami Whitney and the skilled nursing facilities Laufer owns and/or operates prioritized profits above their obligation to focus on their patients’ actual medical needs. In clear violation of the governing regulations, the Defendants fraudulently inflated their Medicare reimbursements by unnecessarily prolonging patient stays and billing for therapy that offered little or no clinical benefit. This Office will continue vigorously to pursue companies and individuals who engage in these practices at the expense of the public fisc.”
Reid Collins partners P. Jason Collins and Jeremy Wells led the prosecution of the whistleblower action on Integra’s behalf. Collins on the DOJ’s intervention: “We are very pleased with DOJ’s intervention in this matter and proud to be part of assisting Integra in its mission to expose those who defraud the government. The government’s intervention is a tremendous validation of Integra’s stellar work on behalf of American taxpayers. Integra’s investigation revealed Laufer to be among the worst offenders in the country, and we have nothing but praise for the outstanding US attorneys in the Southern District who dug into this matter and agreed to prosecute these defendants.”
This is important because this is the first time the DOJ has intervened in a qui tam case brought by an outside firm looking at data.
The Defendants in the government’s complaint-in-intervention are Isaac Laufer, Tami Whitney, Paragon Management SNF LLC, 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 and Nursing, LLC, Forest Manor Care Center, Inc., Surge Rehabilitation & Nursing LLC, and Quantum Rehabilitation & Nursing LLC. Isaac Laufer is a part owner of ten of the eleven Facilities and operates all eleven Facilities through Paragon Management SNF. Tami Whitney is the Coordinator of Rehabilitation Services for the Facilities and in that role she allegedly instructed and pressured staff to engage in the alleged fraudulent practices.