Nursing Home Part B Therapy Fraud: Group Treatment, Individual Bills

Nursing home Part B therapy fraud includes knowingly billing Medicare for unnecessary therapy or recording shared treatment as individual care. A therapist may be treating several residents while the billing system records a separate individual session for each. Medicare and taxpayers pay for the false bill, while residents undergo therapy they do not need. If you work in rehabilitation or healthcare billing, the schedule and the claim may tell different stories about the same hour.

The question reaches beyond how many minutes appear on a bill. It includes why the resident was put on therapy, what the therapist actually provided and who decided how that treatment would be recorded. The Encore Rehabilitation Services cases put those decisions inside the therapy department, where employees could see them happen.

Concurrent Treatment Billed as Individual Therapy

Nursing home Part B concurrent treatment billed as individual therapy represents shared therapist time as individual treatment. The distinction is visible to the people delivering the care: who was with the therapist, whether other residents were treated at the same time and how the encounter entered the billing system.

In April 2020, Encore Rehabilitation Services agreed to pay $4.03 million to resolve allegations that it caused three Michigan nursing facilities to submit false Medicare claims. The Justice Department described unnecessary or unskilled rehabilitation and minutes recorded as individual therapy when concurrent or group treatment had been provided. Former Encore employees brought the whistleblower cases.

One amended complaint alleged that the software offered a way to record the distinction, but management instructed staff to choose individual care:

The alleged instruction made the choice before the therapist entered the encounter. The same complaint described facility billing staff preparing Medicare bills after therapists entered their time. The person submitting the claim and the person deciding what the time entry said occupied different parts of the process.

Part B Therapy After Exhausting Medicare Part A

Part B therapy in a nursing home after Medicare Part A is exhausted can still be covered when the resident needs medically necessary outpatient physical therapy, occupational therapy or speech-language pathology services.

The resident can remain in the same room while the payment basis changes. For therapy covered by SNF consolidated billing, the facility still bills Medicare and pays its outside therapy contractor.

The service code matters alongside the payer. The complaint concerning Encore’s work at Autumn Woods distinguished timed therapy codes, measured in 15-minute units, from untimed procedures. It described the eight-minute rule as requiring at least eight minutes of direct service for the first timed unit. The useful comparison is between the service represented by that code and the treatment the resident received: the therapist’s time, the treatment arrangement and the clinical need.

That puts the therapy schedule, encounter note and submitted claim in the same conversation. We examine where those accounts separate and who controlled the difference.

When the Part B Caseload Becomes a Quota

A Part B caseload target can put the company’s desired volume ahead of the resident’s need for treatment. In a separate Encore complaint, former employees alleged that the company imposed a minimum share of Part B patients who had to receive therapy:

The complaint also alleged that an Encore coordinator directed a therapist to perform billable evaluations instead of nonbillable screenings. The alleged instruction favored an evaluation that could be billed, counted toward the caseload goal and credited toward productivity.

The Autumn Woods complaint described another route to the same result: a supervisor reviewed residents’ files for available Part B coverage and directed the whistleblower to provide services to those residents. The whistleblower alleged that he had to refuse speech therapy for a resident who did not need it. In the complaint’s account, available coverage was driving the assignment.

The incentive is familiar across health care. Fraud and Abuse in the Health Care Market of California, published by the California Research Bureau in 1997, explains how fee-for-service payment ties provider income to the frequency and type of services. Its analysis identifies an incentive to schedule unnecessary examinations. The Encore allegations show what that pressure can look like inside a therapy department: a utilization target, a billable evaluation and a resident selected because coverage is available.

What Are the Documentation Requirements for Skilled Nursing Facilities?

Skilled nursing facility documentation should connect the resident’s clinical need, orders and certifications, treatment delivered and claim for payment. The treatment note should show what the therapist did and how the resident responded.

For a therapist, the contradiction may be between a discharge recommendation and the next assignment. For a rehabilitation manager, it may be between the clinical evaluation and a corporate caseload target. For facility billing staff, it may appear when the service code or units reach the claim. We connect those observations to the resident and the particular service billed.

SNF Therapy Orders Signed After Services Were Billed

SNF therapy orders signed after services were billed call for comparing the dated order, plan of care, certification, treatment record and claim. We examine what direction existed when care was delivered, what the later signature documented and what the facility represented to Medicare.

The Autumn Woods complaint provides examples of why the order and note deserve separate attention. In its Part A allegations, the whistleblower described therapy continuing after a physician issued an order to hold therapy. He also alleged that an occupational therapy assistant recorded 60 minutes of treatment even though her note said she could not arouse the resident and had transported her to nursing.

Each allegation puts a concrete contradiction in view. The resident’s clinical record and the treatment recorded for payment can be compared encounter by encounter. A department’s total productivity would conceal that detail.

Are Skilled Nursing Facilities Liable for Fraudulent Billing?

Yes. A skilled nursing facility can face a False Claims Act case over knowingly false Medicare bills, including claims arising from an outside therapy contractor’s work. The Encore settlement also shows that the contractor can be pursued for causing the facility’s claims.

The work passes through several hands. A practitioner supplies orders or certifications. A therapist evaluates the resident and documents treatment. A contractor manages the therapy operation. Under consolidated therapy billing, the SNF submits the Medicare claim and pays the contractor under their arrangement. Each may hold a different part of the explanation for what Medicare was asked to buy.

The Same Pressure in Other Therapy Cases

Select Medical and Encore GC agreed to pay $8.4 million in July 2021 over allegedly unreasonable, unnecessary or unskilled therapy at twelve New York and New Jersey nursing facilities.

The whistleblower complaint concerning RegalCare alleged that managers added Part B patients and sessions when the facility’s Part A caseload was low. It described instructions to “go Med B shopping”. That allegation gives the therapist a recognizable question: did the resident’s condition change, or did the department need more reimbursable work?

The historical RehabCare allegations show another version of treatment following the payment target. The Justice Department’s account of the Kindred and RehabCare resolution described increasing therapy around assessment periods to raise reimbursement.

Part B Billing and the Change From RUG to PDPM

The older RUG therapy-minute thresholds belonged to Medicare Part A payment. Medicare replaced RUG-IV with the Patient Driven Payment Model for covered Part A SNF stays on October 1, 2019. Patient characteristics and clinical needs became the basis of classification, replacing therapy-minute groups.

A Part B therapy claim instead calls for examining the service, its code and its units.

The old hard outpatient therapy caps were also repealed, effective for services from January 1, 2018. The therapy documentation threshold using the KX modifier is a different mechanism.

How Much Does Medicare Fraud Whistleblower Pay?

A qui tam whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Therapists, rehabilitation managers and billing staff can see decisions that a payment total cannot reveal. Our whistleblower experts build the case around those decisions and the claims Medicare paid.

When the Therapy You See Differs From the Bill

If you know how group sessions became individual claims, or why residents were put on therapy to fill a quota, speak with our whistleblower experts about your therapy department. We build your strongest whistleblower case around the treatment, the billing and the decisions behind both. We bring in Medicare therapy fraud whistleblower lawyers and stay beside you through the case.