Reliant Rehabilitation: Free Nurse Practitioners for Therapy Business

Reliant Rehabilitation Holdings Inc. agreed to pay $6.1 million in the Reliant Rehabilitation fraud case over alleged kickbacks for nursing-home therapy business. The alleged benefits were free or discounted nurse practitioners for facilities and above-market payments to physicians. Someone who knew the staffing arrangement or the physician contract could see a part of the bargain that a therapy bill alone would miss.

The Justice Department announced the False Claims Act settlement on August 23, 2018. Its allegations covered conduct from April 1, 2013, through May 1, 2017.

Free Nurse Practitioners for Nursing-Home Therapy Contracts

The government alleged that Reliant supplied nurse practitioners to client skilled nursing facilities free or below fair market value to obtain therapy business. The facility received clinical labor at a discount. The therapy contractor sought the facility’s rehabilitation work. That is the exchange at the center of the case.

A nursing home’s choice of therapy contractor controls a valuable business relationship. Under Medicare’s consolidated-billing system, therapy is bundled into the facility’s Part A payment. Medicare pays the nursing home, and the nursing home’s contract determines what it pays the outside supplier. The contractor therefore has a financial reason to win the facility’s business even though the facility submits the Medicare claim.

That payment structure explains why the nurse-practitioner arrangement matters. In the government’s account, the benefit offered to the facility was staffing, while the business sought in return was therapy. The alleged inducement sat outside the therapy price: clinical services supplied cheaply or free.

The government’s allegation was that Reliant used a separate clinical service to influence where the therapy business went. An honest therapy contractor has to compete against the staffing subsidy as well as the therapy price. Taxpayers fund the Medicare business that makes the contract worth winning.

Physician Referral Payments Through Supervision Agreements

Physician referral payments were the other part of the alleged arrangement. The government alleged that Reliant paid physicians above fair market value for supervising or collaborating with its nurse practitioners in connection with the facilities’ therapy business.

A discounted nurse-practitioner service gives value to a facility. Excessive compensation gives value to a physician. The contracts, recipients and work being paid for are different, even when the arrangements serve the same commercial objective.

Physicians’ professional services can also be paid separately during a Medicare Part A nursing-home stay. For the alleged Reliant arrangement, the useful comparison is between the supervision or collaboration promised, the work actually performed, the compensation and the therapy business connected to it.

The Business Behind the Patient’s Care

Referral payments can hide inside the contracts surrounding care. The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, describes how financial complexity can help someone conceal fraud. It separates false statements from arrangements that steer business for a kickback. The latter turns attention to who controls the business and what that person or company receives.

That observation helps explain the Reliant allegations. The nursing home bought therapy, the contractor supplied nurse practitioners, and physicians received compensation for supervision or collaboration. The government’s allegation connected them through the effort to obtain therapy business. Someone familiar with the staffing offer or the physician agreement could understand a commercial relationship that was invisible in a resident’s therapy schedule.

Reliant Care Group Was a Different Therapy Case

Reliant Care Group’s settlement, announced in July 2017, concerned a different settling group and different allegations. The government alleged unnecessary physical, speech and occupational therapy for comparatively independent residents whose principal reason for living in the facilities was a psychiatric condition. It also alleged financial pressure on therapists who believed the treatment unnecessary.

A Discount Can Carry the Referral Payment

A separate complaint against Kan-Di-Ki, doing business as Diagnostic Laboratories and Radiology, shows why a benefit can be easy to overlook in ordinary purchasing records. Whistleblowers alleged that Diagnostic Labs offered nursing homes artificially low rates on services the facilities paid for themselves. In exchange, the facilities allegedly sent the supplier business it could bill directly to Medicare Part B and Medi-Cal.

The complaint’s comparison makes the alleged exchange plain:

The parallel is the value transferred through the price of a service. In the laboratory allegation, the facility saved on tests. In Reliant’s case, the alleged benefit was nurse-practitioner services. Both accounts connect what the nursing home received to the business the supplier wanted in return.

What Evidence Is Needed to Prove Fraud?

For an arrangement like the one alleged against Reliant, the evidence connects the benefit, the decision to award therapy business and the resulting Medicare claims. We connect staffing and service records with the facility’s invoices, physician compensation and therapy contracts. With you, we trace who received the benefit, what work was performed and how the arrangement connected to referrals and billing.

An invoice may show the discount without explaining why it was offered. A service record may show the work without showing who absorbed its cost. We bring those views together with the account of someone who understood the arrangement.

What Is the Reward for a Medicare Fraud Whistleblower?

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

A doctor brought the Reliant case as a whistleblower. For someone who knows a comparable arrangement, the question is how the services, payments and decisions fit together. That is the assessment our whistleblower experts make with you.

You Saw What Came With the Therapy Contract

If you know the nurse-practitioner staffing, physician payments or therapy-contract decisions, speak with our whistleblower experts about the arrangement you saw. We work alongside you to build the case and bring in skilled nursing facility fraud whistleblower lawyers who understand therapy contracting and health care referral payments. From assessing what you saw to working with that legal team, we stay alongside you to build your strongest whistleblower case.