Extendicare and ProStep: Nursing Services and Rehabilitation Billing

In the Extendicare and ProStep False Claims Act settlement, the companies agreed to pay $38 million to resolve allegations of effectively worthless nursing care and medically unnecessary rehabilitation therapy. One part concerned essential care residents allegedly went without. The other concerned therapy allegedly provided to reach Medicare’s highest daily payment. If you know the staffing, therapy schedules or assessment records inside a nursing facility, both sides of that billing story may be familiar.

The Department of Justice and the Department of Health and Human Services Office of Inspector General announced the settlement on October 10, 2014. At the time, Extendicare Health Services operated 146 skilled nursing facilities in 11 states through its subsidiaries. Its subsidiary Progressive Step Corporation, known as ProStep, provided physical, speech and occupational rehabilitation services.

The settlement addressed allegations about both the quality of nursing services billed to Medicare and Medicaid and the medical need for therapy billed to Medicare.

Nursing Services So Deficient They Were Allegedly Worthless

The government alleged that Extendicare billed Medicare and Medicaid for nursing services so deficient that they were effectively worthless. The nursing allegations covered 33 skilled nursing homes between 2007 and 2013. The eight states involved were Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.

At the time, the Justice Department called the resolution its largest failure-of-care settlement with a chain-wide skilled nursing facility.

The Justice Department described specific failures: insufficient skilled nurses to care for residents, inadequate catheter care for some residents, and failures to follow protocols intended to prevent pressure ulcers or falls.

The government’s allegation connected those failures to the nursing services for which the facility sought public payment.

Rehabilitation Billing During Assessment Reference Periods

The separate rehabilitation allegation concerned medically unreasonable and unnecessary therapy for Medicare Part A patients, particularly during assessment reference periods. The government alleged that Extendicare provided that therapy so it could bill Medicare at the highest possible per diem rate.

This allegation covered the same period as the nursing-care allegations. The timing mattered because the treatment during those assessment periods fed into the payment level. A decision about when and how intensively to treat a resident could therefore become a decision about Medicare revenue.

We see an ugly imbalance in those allegations. Residents allegedly lacked essential nursing care while receiving rehabilitation designed to reach the highest payment. Taxpayers funded the care, and residents bore the consequences of the decisions about it.

Two Whistleblower Cases and the Records Behind Them

Two whistleblowers brought separate cases against Extendicare. The Justice Department identified one as a RUGS upcoding case involving rehabilitation and the other as an Ohio worthless-services case.

That division matters to someone considering a case about nursing-home billing. The evidence behind omitted or grossly deficient nursing care concerns the services residents received. The evidence behind unnecessary therapy concerns clinical need, treatment intensity and the assessment used for payment. An employee may know one of those accounts in considerable detail.

We assess how the care records connect to the government claim with you. For the nursing allegation, that means understanding the staffing and care practices behind the bill. For the therapy allegation, it means understanding the treatment record, the assessment period and the payment decision. A direction from management can help explain why the recorded service level changed.

The Justice Department announced that the whistleblower in the rehabilitation upcoding case would receive more than $1.8 million as a share of the recovery. It also announced a share of the recovery for the whistleblower in the Ohio worthless-services case. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What the Settlement Required

The civil settlement allocated $32.3 million to the federal government and $5.7 million to the eight state Medicaid programs.

The money was one part of the deal. Extendicare and ProStep also had to enter a five-year Corporate Integrity Agreement covering the chain. The Inspector General required a comprehensive compliance program addressing resident care, including corporate committees responsible for compliance and quality, a committee to assess staffing, and an internal audit program assessing care quality.

Extendicare had to retain an independent monitor selected by the Inspector General to visit facilities regularly and report back to that office. An independent review organization would separately review Medicare claims each year.

Those requirements followed the two practical questions raised by the case: what care residents received and what the government was billed. Staffing review and facility visits addressed the operation where care happened. Annual claims review addressed the payment requests coming out of it. The agreement required attention to both.

What Other Nursing-Home Cases Show

Life Care Centers of America faced government allegations of therapy driven by reimbursement targets rather than clinical need, paralleling Extendicare’s unnecessary-therapy allegations. Salus Rehabilitation’s Medicare upcoding and ramping findings and Medicaid care-plan claims likewise show why Extendicare’s rehabilitation billing and nursing services need separate evidence about care and payment.

You Know the Care Behind the Billing

If you know how nursing coverage, therapy instructions or assessment records differed from the care residents needed, talk with our whistleblower experts about what happened inside your facility. We build the case with you and bring in healthcare fraud whistleblower lawyers who understand nursing-facility care and Medicare billing. We stay beside you from the first call to resolution, working to build your strongest nursing-home whistleblower case.