Salus Rehabilitation: The Payment Target Behind the Therapy Schedule

The Salus Rehabilitation False Claims Act case led to an appeals court order restoring $85,137,095 in Medicare damages for upcoding and ramping, with those damages to be tripled and penalties added. The evidence reached into the daily work of skilled nursing facilities: therapy minutes that rose during payment-setting weeks, billing codes that overstated care, and management pressure to hit reimbursement targets. For a nurse or therapist who has watched a revenue goal become a treatment schedule, that is the part worth understanding.

Salus, also known as La Vie Rehab, provided rehabilitation therapy at Marshall Health and Rehabilitation Center in Florida. La Vie Management managed that facility and Governor’s Creek Health and Rehabilitation Center within a network of 53 skilled nursing facilities. The case covered the facilities, management companies and rehabilitation provider, with evidence connecting decisions above the billing desk to the claims Medicare paid.

A registered nurse certified in preparing resident assessments brought the qui tam case after working as an interim resident-assessment coordinator at Marshall and Governor’s Creek. She continued the whistleblower case after the United States and Florida declined to join.

The original judgment combined Medicare and Medicaid claims, totaling $347,864,285 after tripling and penalties, before the trial court set it aside. In its June 25, 2020 opinion, the Eleventh Circuit restored the Medicare verdict but left the Medicaid claims decided for the companies.

How the Assessment Set Medicare’s Payment

Under the payment model used in this case, a resident’s assessment set the facility’s daily Medicare rate until the next assessment. That made the assessment window valuable: what the facility reported about care during that period affected payments afterward.

The Minimum Data Set assessment covered the resident’s condition, diagnoses, medications and treatments. A registered nurse coordinated or conducted it and certified it as complete. The resulting Resource Utilization Group code began with R for rehabilitation. Its second letter reflected therapy minutes, from Low to Ultra High, and its third reflected nursing assistance and dependence on help with daily living. More intensive care supported a higher daily payment.

The assessment looked back over seven days. Facilities had some flexibility to choose the assessment reference date within a grace period. That timing mattered because Medicare used the reported level of care to set a forward-looking rate. An artificially busy assessment week could therefore raise reimbursement beyond the week itself.

This was the historical Resource Utilization Group model. The court expressly noted that Medicare shifted to a patient-driven payment model in October 2019. The Salus evidence concerns the earlier system, when therapy minutes were built directly into these payment categories.

Upcoding Put More Care on the Bill

The Medicare upcoding evidence showed bills claiming more therapy or more intensive nursing care than the residents’ medical records supported. The discrepancy affected the code that set payment.

A registered nurse serving as the whistleblower’s expert audited 300 Medicare claims across the facility network. She found 56 claims with more therapy minutes reported for billing than the medical records supported.

She also identified 45 claims with overstated nursing-service levels and 50 with extensive nursing services absent from the medical records. The jury found the defendants liable for submitting 420 fraudulent Medicare claims.

The defendants argued that the billing codes were accurate and the supporting entries were missing because of clerical errors. The trial court treated the problem as paperwork defects. The appeals court rejected that framing. The jury could find that the facilities billed for more care than they delivered.

We see the problem with calling that paperwork. The higher code carried a higher price, and Medicare paid it. The documents mattered because they showed what care the resident received while the bill told a more expensive story.

The court connected the false information to the payment: overstating the services raised the amount Medicare paid.

Ramping Made the Assessment Week More Expensive

Ramping meant artificially concentrating services in the assessment window to raise future reimbursement. The court described treatment exceeding patients’ medical needs during the period Medicare used to measure their care.

The expert testified that her audit found 112 instances of ramping. One resident’s bills reported 720 minutes of therapy in each week used to set the payment level, enough for the Ultra High category. Between assessment periods, that resident routinely received far fewer minutes.

The whistleblower also testified that she personally saw ramping at Marshall and Governor’s Creek. She described grace days used on every assessment and patients going without therapy afterward. La Vie Management’s former chief compliance officer confirmed in video testimony that manipulating grace days to maximize reimbursement was not allowed.

The payment-setting week became the target. The court held that the evidence supported the jury’s finding of ramping and explained that medically necessary services alone would have produced a lower reimbursement level.

For someone working inside a therapy department, the sequence is recognizable: the minutes planned, the assessment date, the treatment actually provided and the code billed. In Salus, those connections showed how a scheduling decision could become a false payment input.

Management Set the Target

La Vie Management’s role mattered because the evidence connected its reimbursement targets to the submission of false claims. The appeals court held that the jury could reasonably find that management caused the claims and acted knowingly.

The whistleblower described daily meetings where the rehabilitation director read out the previous day’s therapy minutes and faced criticism about reaching the higher payment category. Asked whether the company or the patients set the payment-category budgets, she said:

Weekly calls with La Vie Management focused on higher payment categories, criticized facilities below budget and praised those above it. A management presentation emphasized raising payment categories and maximizing therapy minutes.

The evidence suggested management had put a gate in front of the lowest bill: staff needed approval before submitting a claim at the lowest payment category. Alongside the targets, calls and testimony, that connected corporate decisions to the facilities’ claims.

The Same Pressure in Other Rehabilitation Cases

Other skilled nursing cases have put the relationship between therapy targets and patient need at the center of the allegations. Extendicare’s $38 million settlement resolved allegations involving substandard nursing care and medically unnecessary rehabilitation therapy. The government also alleged elevated therapy intensity during assessment periods.

Life Care Centers of America agreed to pay $145 million to resolve allegations concerning medically unnecessary rehabilitation therapy. The government alleged that corporate policies targeted Ultra High reimbursement without clinical need and prolonged stays despite therapists’ discharge recommendations.

Those allegations put the same operational question in view: who decided how much therapy a resident would receive, and how did reimbursement targets influence that decision? In Salus, testimony about meetings and budgets answered it.

What Skilled-Nursing Insiders Can Recognize

The useful evidence in a skilled-nursing billing case connects resident care, assessment timing, billing codes and management decisions. Salus shows the value of seeing across those records: an assessment coordinator understood how the treatment history became a payment category, while the audit and testimony connected those categories to the care and corporate targets.

If you work in health care and recognize the pressure in a budget meeting or the difference between a therapy record and a billed code, your knowledge of the work gives that evidence its meaning.

The Congressional Research Service’s 2009 report, Qui Tam: The False Claims Act and Related Federal Statutes, describes the reward: a whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When the Budget Reaches the Therapy Floor

If you know how a reimbursement target changed the care, the assessment or the bill, speak to one of our Whistleblower Experts about what you saw. We work with you to build your strongest skilled-nursing whistleblower case and bring in healthcare fraud whistleblower lawyers who understand how those facilities get paid. We remain your partners throughout the case.