RegalCare: Billing Before the Assessments Were Finished

RegalCare’s nursing home operators and executives agreed to pay $1 million to settle the RegalCare false claims lawsuit over unnecessary therapy and inflated MassHealth claims. They admitted that some Medicare claims should have been billed at lower levels and that billing sometimes went ahead before patient assessments were finished. For a therapist, assessment nurse or billing employee, the case reaches a familiar pressure point: the payment level has been chosen while the clinical paperwork is still catching up.

The Companies and People Controlling the Bill

The government’s February 2025 complaint announcement identified 19 skilled nursing facilities in Massachusetts and Connecticut, their management companies, an owner, a reimbursement executive and a therapy consultant. Their roles reached different parts of the same claim. The government alleged that unnecessary treatment put patients at risk while draining the programs taxpayers fund.

RegalCare Management Group, LLC managed facilities in both states. RegalCare Management 2.0, LLC managed Massachusetts facilities. The owner directed billing decisions, while the vice president of clinical reimbursement worked on the assessments supporting payment. Stern Therapy Consultants supplied and oversaw therapists through management agreements.

The operator settlement describes how responsibility divided inside the business. Management relied on the contracted therapy provider’s clinical judgment for the therapy portion of the RUG score. The reimbursement executive and facility personnel determined the nursing and activities-of-daily-living portion. The therapist’s treatment record and the facility’s assessment therefore reached the same bill through different hands.

Ultra High Therapy Down to the Minute

The former Medicare RUG payment system rewarded higher therapy classifications with higher daily reimbursement. Under the Ultra High category described in the settlement, patients needed at least 720 minutes of medically necessary therapy per week, at least two therapy disciplines, and at least one discipline on five days each week.

The whistleblower’s complaint alleged that management treated the top payment category as the starting point for virtually every Medicare Part A patient. Therapists’ recommendations and patients’ ability to tolerate treatment allegedly gave way to the schedule. Missed minutes had to be made up even when a patient was sick or away at dialysis.

Extra minutes produced the opposite response. According to the complaint, management reduced later sessions to bring the week’s total back to the payment threshold:

The alleged precision served the reimbursement rate. A sick patient’s missed minutes were a debt to make up. Extra treatment was something to trim away. The complaint described managers pressing therapists to follow these schedules despite their clinical objections.

The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, described how paying for the frequency and complexity of health care gives providers an incentive to add unnecessary services. The alleged RegalCare schedules show that incentive stopping at the payment threshold: enough treatment to reach the rate, then no more.

Records Changed, Bills Sent Before Completion

RegalCare’s settlement admissions connect the selected payment level to the records and the billing company. The defendants acknowledged that management directed Ultra High claims and that some lacked support in individual patient need and should have been billed at a lower level.

The agreement’s account of assessment changes is unusually concrete. The vice president of clinical reimbursement, a licensed practical nurse, reviewed and modified records supporting Ultra High billing without seeing or speaking to the patients. Sometimes he made changes without speaking to clinicians. A registered nurse signed the completed Minimum Data Set assessment at his request.

The owner also sometimes directed the outside billing company to bill at RUG levels before the assessment forms were completely finalized in the system. That admission gives a billing employee a different view of the same problem: the claim could move ahead of the document meant to support it.

Who chose the payment level, who changed the assessment, who signed it and who released the claim are separate decisions. Records changed to support a revenue target can connect those decisions across the therapy department, nursing staff, management and the billing company.

The Payment Change Altered the Therapy Schedule

Medicare replaced RUG-IV with the Patient Driven Payment Model on October 1, 2019. Under PDPM assessment and payment, patient characteristics such as diagnosis, function and nursing needs drive classification instead of therapy volume.

The original complaint alleged an abrupt change in treatment after the payment change. In the whistleblower’s analysis, scheduled Part A sessions averaged 60 minutes from September 2018 through September 2019, then fell to 47 minutes in October and November 2019. She also alleged that management began routinely scheduling group or concurrent therapy without regard to individual suitability, including groups of up to six patients, and shortened treatment stays regardless of continuing need.

The complaint also alleged that, in December 2019, management ordered repeat evaluations for Medicare Part A therapy after the therapist had documented no clinical need for physical therapy.

Part B Therapy When the Part A Caseload Fell

The complaint also alleged that management added Medicare Part B therapy when Part A business slowed. The whistleblower described an instruction she received at the Maplewood facility:

The alleged Part B therapy billing practice had its own scheduling target. The complaint described sessions set at 25 minutes to obtain two billing units while minimizing treatment time.

According to the complaint, the reason for adding therapy was a shortage of other billable patients, not a change in medical need.

MassHealth Paid According to a Different Assessment

The Massachusetts allegations concerned inflated long-term-care claims and records supporting additional services that patients allegedly did not need. This part of the case followed MassHealth’s own payment system, on a different calendar from Medicare’s therapy reform.

Through September 2023, the operator agreement explains, MassHealth used Management Minutes to help determine payment per patient per day. A Management Minute Questionnaire recorded care needs such as medications, mobility, eating and continence. The resulting minute range placed the patient in a payment group. Greater care needs meant higher reimbursement.

The defendants admitted that, during the Medicaid period from April 2018 through September 2023, the owner and reimbursement executive directed reviews that produced higher questionnaire scores and increased MassHealth reimbursement. Massachusetts alleged that documentation had been altered to support increased services without the corresponding clinical need.

For a nurse or reimbursement specialist, the connection runs from the care documented at the bedside to the questionnaire and then to the paid classification. A higher score brings the facility more money. The patient’s record has to explain the additional care behind it.

A Whistleblower Case, Then Separate Settlements

A physical therapist who worked at Maplewood brought the original qui tam case in 2020. Her complaint named RegalCare Rehabilitation, LLC, Stern Therapy Consultants and Ultimate Therapy LLC. The federal and Massachusetts governments joined the case and brought their own allegations against the management companies, owner, executive, facilities and consultant.

On March 4, 2026, the Department of Justice announced Stern Therapy Consultants’ separate settlement. That agreement addressed the therapy consultant’s role. The later operator agreement, signed in September 2026, separately addressed RegalCare management, the owner, the reimbursement executive and the named facility companies.

The Same Pressure in Other Therapy Cases

Life Care Centers of America agreed to pay $145 million in 2016 over allegations that corporate efforts to maximize Ultra High classifications and prolong stays displaced treating therapists’ judgments. The Justice Department’s account described tracking minutes and lengths of stay to meet revenue targets. Like the RegalCare allegations, the pressure reached both how much therapy a patient received and how long it continued.

Kindred/RehabCare agreed to pay $125 million in its 2016 therapy settlement. The government alleged automatic placement in the highest category, treatment timed to thresholds and inflated assessment-period minutes. Separate settlements reached facility customers accused of failing to prevent the practices. The allegations connected the contractor’s therapy practices to the facilities’ claims, the same division of responsibility that makes the operator and consultant roles worth following separately here.

What Evidence Is Needed to Report Fraud?

Our whistleblower experts connect clinical need, treatment schedules, assessment changes and billing decisions for the same patient and service period. We examine where the chart and the claim diverge, including the management instructions behind the difference.

A therapist may know why the scheduled treatment contradicted the evaluation. An assessment nurse may know who changed a score and requested a signature. A billing employee may know that a claim went out before the assessment was finished. Together, those accounts can explain how a payment target traveled through the healthcare business and reached Medicare or MassHealth.

A whistleblower case under the False Claims Act can pay a whistleblower reward of 15% to 30% of what the government recovers.

You Saw How the Payment Level Was Chosen

If you saw therapy schedules override clinical judgment or watched assessments change to support a bill, talk with our whistleblower experts about what happened inside the facility. We work alongside you to build the case around those decisions and bring in nursing home fraud whistleblower lawyers who understand therapy, assessments and Medicare and Medicaid billing. We stay alongside you throughout the case, turning what you know about the care and the billing into your strongest nursing home whistleblower case.