Reliant Care Group: When Therapists Said the Therapy Was Unnecessary

In the Reliant Care Group fraud case, Reliant agreed to pay $8,368,878 to resolve allegations of unnecessary Medicare therapy for residents living in nursing homes primarily because of psychiatric conditions. Some rehabilitation managers allegedly pressed therapists to provide treatment even when the therapists believed the residents did not need it. The government’s account put the treating therapists’ judgment at odds with management’s demands.

The Justice Department announced the False Claims Act settlement on July 5, 2017. Reliant Care Group was the Missouri holding company for Reliant Care Management Company, which managed healthcare facilities, and Reliant Care Rehabilitative Services, which managed therapy.

The agreement describes how the claims reached Medicare: Reliant Care Rehabilitative Services supplied physical, occupational and speech therapy, and the contracted facilities submitted claims based partly on that therapy and the information the therapy company supplied. Its customer list included homes outside the Reliant ownership group. The therapist’s employer and the facility sending Medicare the bill could occupy different places in the business.

Which Nursing Homes Were Involved?

The agreement’s facility list spans Missouri and Illinois. Reliant-managed homes included Bernard Care Center in St. Louis, Bridgewood Health Care Center in Kansas City, Levering Regional Health Care Center in Hannibal and Nathan Health Care Center in East St. Louis. Outside the ownership group, the therapy company’s customers included Hillside Manor Healthcare and Rehabilitation Center in St. Louis and Prairie Crossing Living and Rehabilitation Center in Shabbona.

The inspector general’s listing also identifies Reliant Care Rehabilitative Services by the trade name Innovate Rehab & Wellness.

Psychiatric Residents and the Therapy Medicare Paid For

The government’s Part A allegation concerned residents whose claims listed a primary psychiatric diagnosis and whose assessments showed a high level of independence. It alleged that Reliant caused facilities to bill medically unnecessary rehabilitation at inflated payment rates from January 1, 2008, through April 30, 2014.

The agreement identifies activities-of-daily-living composite scores of A or B as the measure of that independence. The allegation paired those scores with the psychiatric diagnosis and the level of rehabilitation billed. The government alleged that Reliant put its own finances ahead of residents’ treatment needs and sent Medicare the bill.

The agreement also covers a separate Medicare Part B therapy allegation, from January 1, 2009, through June 30, 2014. That allegation concerned unnecessary rehabilitation for patients whose claims showed a primary psychiatric diagnosis. Across both parts of Medicare, the government alleged that financial considerations drove the treatment and that some rehabilitation managers pressured therapists to provide care they considered medically unnecessary.

A therapist’s assessment was supposed to explain the treatment. According to the government’s account, management was pushing for the treatment despite that assessment.

Why the Therapy Category Mattered

Under the historical resource utilization group system, therapy minutes, the disciplines providing treatment and assessment timing helped determine a facility’s Medicare Part A payment category. Therapy records therefore carried a financial consequence as well as a clinical one. Reliant’s agreement specifically alleges that unnecessary rehabilitation allowed facilities to bill at inflated RUG rates.

The assessment calendar mattered because the payment system used defined observation periods. A treatment log, the date selected for an assessment and the category placed on the claim could connect a manager’s treatment demand to the facility’s reimbursement.

On October 1, 2019, the Patient Driven Payment Model became the classification system for covered Medicare Part A stays. Patient characteristics and clinical needs became the classification basis. For today’s assessment and payment cases, the financially important entries include diagnoses, function, nursing characteristics and other care needs. Reliant’s settlement concerns the earlier system, when the therapy volume itself helped set the rate.

What Evidence Is Needed to Prove Fraud?

For this allegation, proof connects the resident’s clinical needs and treatment to the assessment, Medicare claim and people directing the therapy. We work with you to connect the clinical record and the bill, including what happened when a therapist questioned treatment.

A therapist may know why treatment was questioned. An assessment coordinator or billing employee may see how that same treatment became a payment category or claim. In Reliant’s arrangement, the contracted facility submitted the claim using information from the therapy company. Understanding the decisions inside both businesses is part of the work we do with an insider.

In Medicare home health, a different care setting, a 2026 National Bureau of Economic Research working paper, Medicare Home Health Fraud: How Much, Where, and Who?, identified a pattern in the Medicare home health agencies it classified as fraudulent:

The question that finding raises for a clinical review is whether the treatment fits the patient. In Reliant’s case, the government made residents’ independence and therapists’ objections central to its account of why the billed rehabilitation was unnecessary.

What the Settlement Required

Reliant entered a five-year corporate integrity agreement with the HHS Office of Inspector General. The settlement required annual reviews by an independent review organization and reports to the inspector general.

Reliant had to bear the specified review and reporting costs itself. The cost of these checks could not become another Medicare expense. The agreement also barred Reliant from handing the covered health care bills to residents or their families.

A Different Reliant Case Involved Referral Payments

Reliant Rehabilitation Holdings Inc.’s 2018 settlement concerned alleged payments and services used to obtain therapy business. The government alleged that the company supplied nurse practitioners to nursing homes free or below fair market value and paid physicians above fair market value for supervising or collaborating with them.

When a Treatment Target Outranks Clinical Judgment

In the separate case against Life Care Centers of America, the government alleged that corporate targets drove therapy levels and prolonged stays after treating therapists believed therapy should end. Its complaint quoted a company manual describing how the therapy disciplines were expected to meet their targets:

The manual described a shortfall in minutes as something another discipline could make up. Reliant’s alleged pressure presents the same clinical question from a different direction: who decided the resident needed treatment, and what happened when the treating therapist disagreed?

When You Know Why the Therapist Objected

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. If you saw clinical judgment give way to a treatment target, speak with our whistleblower experts about the therapy and the Medicare claims. We work with you to build your strongest nursing home whistleblower case around the decisions you witnessed, bring in nursing home fraud whistleblower lawyers who understand therapy billing, and stay beside you through the case.