Fairfax Nursing Center: Therapy Aimed at the Reimbursement Rate

In the Fairfax Nursing Center fraud case, the facility and its owners agreed to pay $700,000 to resolve allegations of billing Medicare for excessive and medically unnecessary rehabilitation therapy. The government alleged that some treatment lacked clear goals, duplicated services or served a higher reimbursement rate. A therapist who knows what the patient needed can see a problem that the bill alone does not explain.

The Department of Justice announced the settlement with the Fairfax, Virginia skilled nursing facility on February 13, 2013. The alleged cost fell on both sides of the treatment room: residents received therapy they did not need, and Medicare was billed for it.

Therapy Documentation and Treatment Goals

The government’s allegations covered physical, occupational and speech therapy for 37 Medicare beneficiaries treated between January 2007 and December 2010.

The Justice Department alleged that Fairfax knowingly submitted or caused the submission of false claims for rehabilitation services ineligible for Medicare payment. The government described therapy that was often duplicative and performed without clear goals or direction. In some instances, it alleged, the primary purpose was to capture a higher reimbursement rate.

That last allegation puts the treatment goal and the financial goal beside each other. One concerns what the patient needs. The other concerns what the facility can bill. In Fairfax, the government alleged that the financial goal sometimes drove the treatment. Medicare was paying for rehabilitation, and the alleged purpose of some of that rehabilitation was to make Medicare pay more.

The documentation question follows the care. What condition was being treated, what was the session meant to accomplish, and how did the therapy recorded support the claim? Those connections make treatment goals useful evidence. A total on a therapy log tells us how much time was recorded. The clinical notes help explain why that time was needed.

Why Therapy Minutes Mattered to Payment

Under Medicare’s old payment system, more therapy minutes could move a resident into a higher-paying category. That gave a financial purpose to additional minutes, and explains why the relationship between a treatment schedule and a patient’s needs matters in these cases.

The same tension appears more explicitly in a separate case against Life Care Centers of America. The government’s complaint alleged that rehabilitation managers confronted therapists who missed their assigned minutes or the highest payment category. Managers made them write memoranda explaining the shortfall:

That is a revealing way to judge a clinical decision. It shows why an instruction from management can matter alongside the treatment note.

The government also alleged that a rehabilitation manager instructed staff not to reduce planned minutes while a patient was in an assessment. The minutes, according to the manager’s memorandum, had already been planned to reach a particular payment category by a particular date. That is the conflict a therapist would recognize: pressure to preserve the billing category when a clinical decision could change the treatment schedule.

Medicare began using the Patient Driven Payment Model for covered skilled nursing stays on October 1, 2019. Fairfax’s treatment period belongs to the earlier payment era.

What Evidence Is Needed to Prove Fraud?

For a therapy billing case, the useful evidence connects the patient’s condition and actual treatment to the assessment, the claim and the people directing the work. We examine that connection across clinical and business records.

The health care records tell us what treatment was planned, authorized and recorded. Notes about participation and discharge recommendations help explain whether the course of treatment matched the patient’s needs. Comparing those records with the assessment and billed services lets us follow the clinical account into the payment request.

Schedules, time records and contractor records can connect a session to the person assigned to deliver it. Therapy contracts and management instructions help identify who set expectations and who controlled the work. A therapist may understand the treatment decision, while someone in billing can explain what the bill told Medicare.

Who Bills for a Contract Therapist’s Work?

A facility can use an outside therapy provider while remaining responsible for the Medicare bill. Under Medicare’s consolidated billing system, therapy belongs in the facility’s bill. The contract then governs payment to the outside provider. Following both records connects the company providing the therapist with the facility submitting the claim.

The Facility, Its Owners and the Therapists

Fairfax Nursing Center, Inc. and its owners were the settling parties. Two former facility therapists and one former contract therapist brought the qui tam case. Their documented roles put the whistleblowers on the treatment side of the business, with experience inside the service Medicare was funding.

A similar connection between a contractor’s staff and a facility’s claims appears in Saunders House’s separate settlement. There, a physical therapist assistant employed by a contracted therapy provider brought the case. The government alleged that the facility permitted the contractor to manipulate clinical services to maximize the highest therapy billing category, alongside allegations of unnecessary therapy and services not provided. The facility agreed to settle.

The Settlement and Whistleblower Reward

The Justice Department announced that the therapists who brought the Fairfax case would collectively receive a share of the recovery.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For someone who knows how treatment decisions became Medicare claims, that is a reason to bring the clinical account and the billing question to our whistleblower experts together.

When the Treatment Goal Became a Billing Target

If you saw therapy driven by reimbursement while the clinical notes told a different story, tell our whistleblower experts what happened. We work with you to build the case around those decisions and bring in healthcare fraud whistleblower lawyers who understand therapy billing. We stay beside you as partners from your first account of the treatment through the pursuit of a recovery.