Encore Rehabilitation Services: One Therapy Session, Two Sets of Minutes

In the Encore Rehabilitation Services fraud case, the company agreed to pay $4.03 million to resolve allegations of unnecessary or unskilled rehabilitation and concurrent or group therapy recorded as individual treatment. The government alleged that Encore caused three Michigan skilled nursing facilities to submit false Medicare claims. Inside the therapy department, the distinction was concrete: how many patients a therapist treated together, and how many minutes the billing system credited to each.

In its April 10, 2020 announcement, the Justice Department described the Farmington Hills, Michigan contractor as providing rehabilitation services at more than 600 healthcare facilities in more than 30 states. Former Encore employees brought three qui tam cases under the False Claims Act.

Which Is an Example of Billing Fraud?

Recording concurrent treatment as individual therapy was one of the billing fraud allegations in Encore’s case. One whistleblower’s amended complaint explained the difference with an hour spent treating two patients:

The same complaint alleged that Optima allowed therapists to record concurrent care and individual care separately, but Encore directed them to bill every session as individual.

The complaints also describe pressure to supply therapy regardless of clinical need. In another complaint, whistleblowers alleged that Encore required therapy minutes to be set without medical records, therapist evaluations or progress notes. According to the complaint, management told a therapist who reported tolerance problems to keep the patient at Ultra High and ensure the team “got the minutes” anyway. That puts the payment target ahead of the clinical decision: decide how much therapy to bill, then make the patient fit it. The alleged scheme put taxpayers’ money behind treatment targets that overrode residents’ needs.

Why the Old RUG Numbers Mattered

The historical Resource Utilization Group payment system made counted therapy minutes financially valuable. Its Ultra High category required at least 720 minutes a week across two therapy disciplines, with one provided five days weekly. Reclassifying shared treatment as individual treatment could help put a resident over a reimbursement threshold without adding treatment time.

Group therapy had its own counting rule. From October 2011, Medicare divided four-person group therapy minutes by four for RUG-IV classification. Time in the therapy room and the minutes credited toward a payment category were different things. Calling shared treatment individual treatment changed the billing account of what happened in that room.

All three Encore settlement periods ended before the Patient Driven Payment Model replaced RUG-IV on October 1, 2019. That change shifted Medicare’s covered Part A nursing-facility payment classification from therapy-minute groups to patient characteristics and clinical needs. Encore’s allegations belong to the earlier system, when the minutes recorded could move the payment category.

Under PDPM, false information about a resident’s condition or care needs can instead change the payment group. The clinical notes, facility assessment and resulting claim still need to tell the same story.

The Michigan Facilities and Their Covered Periods

The settlement addressed Encore’s alleged conduct at these facilities during different periods, as the Justice Department’s announcement specifies:

What the Encore Settlement Required

Alongside the payment, Encore entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. The agreement required a risk assessment and internal review process to identify and address compliance risks, plus training, auditing and monitoring aimed at the conduct in the case.

Encore Rehabilitation Services’ Michigan settlement is separate from the Select Medical and Encore GC Acquisition settlement announced in July 2021. That case concerned therapy at twelve New York and New Jersey facilities before Encore GC Acquisition acquired the provider.

What Evidence Is Needed to Report Fraud?

We connect the treatment delivered, the minutes recorded, the instructions behind those entries and the Medicare claims to build a therapy billing case. The Encore complaints show how specific that connection can be. The whistleblower who described concurrent sessions alleged that she had first-hand knowledge and documentation covering at least 200 days when she provided concurrent care but billed individual sessions.

The amended complaint also alleged that Encore removed Optima’s designated section for nonbillable activities in October 2013 because it did not want a record of time that would undermine its therapists’ reported productivity. That allegation points to a second comparison: the time the therapist worked against the time recorded as billable treatment. A productivity figure can conceal the very activities the system no longer records.

We examine how therapy schedules and session entries fit the clinical notes, evaluations and progress notes for the same residents. Facility assessments and Medicare claims show how those entries affected payment. Management instructions and changes to the billing records can show who controlled the account of the care. The clinical record answers what the patient needed and received. The billing record answers what Medicare was told.

Contracts matter too. They identify the facility-contractor relationship behind the services, while productivity policies describe what management expected of therapists. Connecting those different records is the work of building the case with you.

The Contractor’s Instructions and the Facility’s Claim

A therapy contractor can shape the care and the records that a nursing facility uses to bill Medicare. The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, described how complex contractual and financial arrangements can work to a fraudster’s advantage. Encore’s case gives that structural problem a concrete form: instructions inside the therapy company allegedly produced false claims at its customers’ facilities.

The Quality Therapy & Consultation resolution shows both sides of that relationship. In June 2019, the Justice Department announced a $9.7 million resolution involving the therapy provider, its owner and four nursing facilities. It alleged that they increased residents’ RUG scores and provided therapy patients did not need or could not benefit from to maximize Medicare payments. Quality Therapy’s own payment obligation was $1.09 million. The announcement assigned separate amounts to the facilities and the owner.

That division matters to an insider who sees only one side of the business. The people directing treatment, recording minutes and submitting claims can work for different companies. Their records describe different parts of the same care, and the case comes together where those accounts diverge.

When the Minutes Do Not Match the Care

If you treated residents together but recorded individual sessions, or saw therapy targets override clinical needs, talk with our whistleblower experts about what happened in your department. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We build the case around the care, the billing and the decisions you witnessed, bring in Medicare therapy fraud whistleblower lawyers, and stay beside you through the case.