Department of Justice Takes Active Role in Lawsuit Against Nursing Home Chain

For the past six years, the Ohio-based nursing home chain HCR ManorCare has been embroiled in a whistleblower lawsuit featuring allegations that the company systematically overbilled Medicare and often put its residents through overly rigorous rehabilitation schedules in efforts to increase revenue. Now the U.S. Department of Justice is stepping in, which means an end to the case could be imminent.

The issues began when an occupational therapist in northern Virginia filed a lawsuit accusing HCR ManorCare of pressuring its nursing home administrators to meet unrealistic financial targets through overbilling. According to the lawsuit, the company regularly pushed its patients into the highest tier of rehab services available under Medicare, regardless of their needs. As a result, it was able to increase the total amounts it billed the federal program.

One example cited in the lawsuit was the jump in reimbursement rates over a three-year period. In 2006, HCR ManorCare billed Medicare at the top rate of reimbursement in 39 percent of cases, compared to 80 percent in 2009. The lawsuit also details the case of an 85-year-old man being put through a 100-day therapy routine, even though medical records only called for hospice care and therapists had described him as being “medically fragile.”

Although there is no specific amount investigators gave for how much HCR ManorCare overbilled Medicare, official documents do state that Medicare paid more than $6 billion to the 281 HCR ManorCare facilities between January 2006 and May 2012.

If you are aware of fraud happening within your business or organization, consult the trusted Dallas lawyers at Whistleblower Law for Managers for the advice you need.