Catholic Health System: Ultra High Therapy the Charts Did Not Support

The Catholic Health System Buffalo therapy fraud case ended in an agreement to pay $6,000,000 over allegations of unnecessary rehabilitation and unsupported Ultra High RUG claims at three facilities. The government said residents received unreasonable, medically unnecessary levels of therapy. Catholic Health billed Medicare for those levels even though, according to the government, the residents’ own medical records did not support them.

What the Catholic Health Settlement Covered

Catholic Health System provided rehabilitation at skilled nursing and post-acute care facilities in the Buffalo matter. The Justice Department’s October 27, 2017 announcement concerned claims submitted by its subsidiary Home & Community Based Care, formerly Continuing Care. The named care sites were Father Baker Manor, St. Francis Williamsville and McAuley Residence.

The alleged claims ran from January 1, 2007 through December 31, 2014. The government said Catholic Health submitted or caused false Medicare claims for rehabilitation provided at its long- and short-term skilled nursing and post-acute care facilities. The allegation focused on Ultra High Resource Utilization Group levels, a payment classification tied to therapy under the system then in use.

This therapy billing case put medical necessity and the supporting chart at the center of the bill. The alleged problem reached into the care residents received: the government said the level of treatment itself was unreasonable. Taxpayers were being asked to fund that treatment through the higher classification.

Why Ultra High RUG Therapy Could Change the Bill

Under historical RUG payment, recorded therapy volume helped determine the facility’s payment category. The Justice Department’s description of the Ultra High category in the separate Life Care Centers of America case explains the threshold: at least 720 minutes a week across two therapy disciplines, with one discipline furnished five days a week.

That made the treatment schedule financially consequential. The minutes, the disciplines and the days on which therapy occurred could all affect whether a resident reached the category. An insider looking at an Ultra High claim would therefore care about what treatment occurred, whether the resident needed it and how the facility recorded it for payment.

In Life Care’s case, the government alleged that corporate efforts to maximize Ultra High classifications and prolong stays drove treatment after therapists believed it should end. Tracking minutes and length of stay allegedly served revenue targets rather than individual need. The allegation against Catholic Health was that the therapy levels were unreasonable, unnecessary and unsupported by the medical records.

The Medicare payment model changed after the Buffalo conduct period. The Centers for Medicare & Medicaid Services implemented the Patient Driven Payment Model on October 1, 2019 for covered skilled nursing facility stays under Medicare Part A. The payment reform replaced therapy-minute groups with patient characteristics and clinical needs as the basis for classification. The Buffalo case belongs to the earlier system, when therapy volume had a direct role in assigning the payment group.

Under PDPM, diagnoses, function, nursing characteristics and nontherapy ancillary needs affect payment. The resident assessment feeds those clinical details into classification, while therapy remains part of the bundled payment. For a current insider, unsupported MDS assessments raise the question of whether the payment group matches the resident’s actual condition. The incentive has moved, but the need to connect the assessment to the clinical record remains.

What Evidence Is Needed to Prove Fraud?

For an allegation like Catholic Health’s, the evidence connects the resident’s treatment and clinical need to the assessment, claim and payment. It also connects those records to the people who directed the treatment, entered the information or controlled the billing. That is how an insider’s account of unnecessary therapy becomes an account of a false Medicare claim.

The Minimum Data Set draws on observations across shifts and the resident’s own information. A registered nurse coordinates or conducts the assessment, and each contributor certifies the accuracy of their portion. The completed assessment has to rest on the underlying care record. That connection matters when the treatment notes describe one level of need and the assessment supports a higher payment category.

For this kind of therapy allegation, we examine contemporaneous treatment notes and therapy logs alongside assessment dates and coding changes. Patient participation and discharge recommendations can explain what the resident could tolerate and why therapy continued. The assessment and billing records show how the facility turned that account into a payment category. The paid claim completes the connection to Medicare’s money.

Schedules, time records and payroll can help test the account of who was available to deliver the reported treatment. Contracts and management instructions can help identify who controlled the therapy operation and the information reaching billing.

A therapist may understand the treatment note, an assessment coordinator the change in coding, and a billing employee the claim that followed. We work with the insider to connect those views. The useful account explains how the clinical decision reached the bill and who understood the difference between them.

Catholic Health in Buffalo and ArchCare Are Separate Cases

The Buffalo settlement concerned Catholic Health System and Home & Community Based Care. The earlier Catholic Health Care System settlement concerned ArchCare, which agreed to pay $3.5 million in a resolution announced March 2, 2015.

At ArchCare’s facilities, the government alleged inflated Medicare claims through unnecessary therapy or false reports of treatment delivered. Its account included extra therapy during assessment periods, automatic placement in high categories, rounding minutes and counting evaluation time as treatment.

The government said ArchCare used therapy during assessment periods to support rates higher than the care it furnished outside those periods. The assessment window could therefore give a different picture from the rest of the stay. Those practices explain why assessment timing and the actual treatment record matter in therapy cases.

The Settlement Included Five-Year Oversight

Catholic Health also agreed to enter a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General.

A whistleblower brought a qui tam lawsuit against Catholic Health System under the False Claims Act. A whistleblower case under the False Claims Act can pay the whistleblower 15% to 30% of what the government recovers.

You Know What Was Behind the Therapy Level

If you saw treatment decisions bent toward an Ultra High category, tell our whistleblower experts what happened inside the facility. We build the case with you around the clinical decisions and claims, bring in Medicare therapy fraud whistleblower lawyers, and stay beside you through the pursuit of a recovery.