Longwood Management: The Revenue Target Came First

Longwood Management Corporation and 27 skilled nursing facilities agreed to pay $16.7 million in the Longwood Management therapy fraud case, resolving allegations that Medicare revenue targets drove unnecessary Ultra High therapy. The alleged problem began before a therapist chose a treatment plan: management had already chosen the revenue it expected. Residents allegedly received treatment they did not need, and taxpayers paid for it. The whistleblowers’ collective reward was approximately $3 million from the Longwood settlement.

The Department of Justice announced the Longwood settlement on July 13, 2020. The Office of Inspector General identifies Longwood’s headquarters as Los Angeles and the facilities as Southern California homes. The resolution addressed Longwood’s part in two whistleblower cases. Interface Rehab, the outside therapy contractor, later reached its own settlement over its role in the alleged conduct.

Medicare Paid the Facility, the Facility Paid for Minutes

The facility and its therapy contractor had different ways of getting paid. Under Medicare’s bundled payment for skilled nursing health care, the facility received payment for the covered stay and paid an outside therapy supplier under its contract. Hiring a contractor put another business between the resident’s treatment and the facility’s Medicare claim.

According to the whistleblower’s complaint about the Longwood and Interface arrangement, Longwood hired Interface to manage rehabilitation services and paid it by the minute. That gave therapy volume a direct place in the contractor’s invoice as well as in the facility’s reimbursement calculation.

During the period covered by the allegations, Medicare paid skilled nursing facilities a daily rate reflecting patients’ nursing and therapy needs. The Justice Department’s explanation of the payment system identifies Ultra High as the highest reimbursement level, requiring at least 720 minutes of skilled therapy from two disciplines, with one provided five days a week.

The complaint alleged that the companies assigned licensed Interface therapists to work that Longwood nurses could have performed, increasing the daily Medicare reimbursement. The resident’s needs and the kind of employee assigned to meet them became part of the same billing decision.

Ultra High Therapy Before the Clinical Decision

The government alleged that Longwood’s preplanned revenue targets pressured therapists to provide unnecessary Ultra High therapy. The complaint gives that pressure a recognizable form: an orientation instruction.

The whistleblower further alleged that evaluating therapists could not designate a lower reimbursement category for incoming patients. On that account, the assessment started with its answer already supplied. The therapist could evaluate the resident, but management had reserved the payment decision.

The complaint also cited an Interface weekly statistics report dated September 9, 2012, showing 220 of 300 patients at Longwood Management facilities assigned to Ultra High rehabilitation and none to Low.

Uniform treatment patterns also matter beyond skilled nursing. In Medicare home health, the 2026 National Bureau of Economic Research working paper Medicare Home Health Fraud: How Much, Where, and Who? found that agencies it classified as fraudulent were more likely to provide unusually uniform care and serve healthier patients. The finding helps explain why the connection between a patient’s condition and a repeated treatment pattern deserves attention. In Longwood’s case, the complaint supplied an alleged instruction behind that pattern.

Discharge Decisions Followed the Coverage

The alleged pressure extended to how long residents stayed. According to the complaint, a request to discharge a patient could meet resistance while Medicare Part A coverage remained available.

The complaint alleged that an Interface regional supervisor could change the length of a patient’s stay in the computer system without physically examining the patient. That places the decision in an ordinary workplace record: who changed the stay, following whose instruction, after the clinician had reached a different conclusion.

For a therapist who has seen a discharge recommendation overridden, the distinction is familiar. A resident’s clinical needs tell one story. An instruction to keep billing while coverage remains tells another. The alleged financial target reached both the intensity of treatment and the date it would stop.

Therapy in the Records, but No Treatment

The complaint alleged that the companies billed for therapy the patients never received. A former Interface rehabilitation director described finding treatment entries about two days after he had declined to treat those patients. He said he saw no therapists present when he left, and the entries appeared out of their normal chronological order.

His job put him between the patients, the therapy schedules at Longwood Manor and the payment worksheets. Those duties put the instructions and the resulting records in the same person’s view.

The timing matters because it connects what the insider saw with what the paperwork later said. In a case like this, we examine how schedules and service logs fit the clinical notes, who could change the entries, and how those entries reached the payment claim. A therapy employee may know the care and the instruction behind it. A billing employee may know how the same treatment entered the claim. We use that combined view to build the case around who directed the billing and what they knew about the care.

Longwood and Interface Reached Separate Settlements

Longwood’s settlement included a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. The government’s announcement covered alleged conduct from January 1, 2006 through October 10, 2014 at homes including Longwood Manor, and May 1, 2008 through August 1, 2012 at others.

Interface Rehab’s smaller, separate settlement required it to pay $2 million, according to the announcement on July 23, 2021. The government alleged that the contractor submitted or caused false Medicare claims for unnecessary Ultra High rehabilitation at 11 facilities, including Longwood Manor. Its allegations covered the same earlier period described for that home.

The Justice Department said Interface pressured therapists to increase treatment to meet preplanned Medicare revenue targets. According to the government, reaching those targets required billing a high percentage of patients at Ultra High without regard to their individual needs. The later settlement resolved the contractor’s role in the conduct associated with Longwood’s earlier agreement.

The same healthcare billing pattern appeared in RehabCare’s national therapy settlement. There, the government alleged that the supplier caused false facility claims through practices including automatic placement at the highest reimbursement category. Separate agreements addressed customers that allegedly failed to prevent the practices. The payment claim left the facility, while the decisions shaping it could run through the contractor.

The Payment Model Changed After the Alleged Conduct

These allegations concern Medicare’s historical therapy-based payment system. Medicare began using the Patient Driven Payment Model on October 1, 2019 to classify skilled nursing patients in covered Part A stays.

For an insider, the connection to follow is still the one between what the patient needed, what management directed and what the facility represented to Medicare.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw Who Chose the Therapy Level

If your clinical judgment gave way to a revenue target, or the treatment record changed after you left, speak to our whistleblower experts about who set the therapy levels. We build the case with you around the care, the instructions and the claims, and bring in skilled nursing facility fraud whistleblower lawyers who understand therapy billing. We stay with you through the process, using that inside knowledge to build your strongest therapy fraud whistleblower case.