Select Medical Encore GC: More Therapy, Without Reading the Chart

In the Select Medical Encore GC fraud case, Select Medical Corporation and Encore GC Acquisition LLC agreed to pay $8.4 million over allegations of unreasonable, unnecessary or unskilled rehabilitation therapy billed to Medicare. The whistleblower’s complaint described a regional director increasing scheduled treatment without reading the patient’s chart, sometimes even after the resident had died or left the facility. For a therapist whose clinical judgment gave way to a payment target, the allegation is painfully recognizable.

The Justice Department announced the settlement on July 2, 2021. It alleged that corporate therapy practices caused twelve skilled nursing facilities in New York and New Jersey to submit improper Medicare claims at various times from January 1, 2010 through March 31, 2016.

Select Medical Rehabilitation Services Inc. provided the contract therapy. Select Medical Corporation was its former parent, and Encore GC Acquisition LLC was its successor in interest. The government placed the covered conduct before Encore’s acquisition.

Therapy Scheduled to Meet the Revenue Target

The complaint alleged that management set treatment targets around Medicare reimbursement instead of residents’ needs. The whistleblower was a certified speech pathologist who had worked for Select Medical, including as a director of rehabilitation at a contracted facility. Her job put her inside the scheduling decisions the case challenged.

According to the complaint’s account of staff training, the regional director emphasized that the facilities hired Select Medical to make them money:

The alleged instructions reached the treatment plan before the therapist did. Newly admitted Medicare Part A patients could be scheduled for an evaluation followed immediately by 75 minutes of therapy before a therapist had decided whether to recommend any treatment. The complaint also described a default instruction to add occupational therapy whenever physical therapy was scheduled, regardless of the occupational therapist’s evaluation.

In the complaint’s telling, the insurance coverage supplied the answer before the clinician had asked the question. The facility’s revenue target became the resident’s treatment schedule.

Which Is an Example of Billing Fraud?

Causing a nursing home to bill Medicare for therapy driven by a revenue target instead of clinical need was the alleged billing fraud here. The complaint described how a regional director could remotely change 45 scheduled minutes of physical therapy to 90, without reviewing or asking about the resident’s medical records, most often to reach the Ultra High payment category.

The complaint alleged that the schedule sometimes became completely detached from the resident:

The whistleblower also described a visible conflict between paper and electronic schedules. Therapists received a printed schedule in advance, then logged in the next day to find more minutes on the computer. She alleged that she changed the electronic schedule back and the therapists delivered the originally planned treatment.

Those competing versions matter. They connect an instruction from management to a specific resident’s treatment plan, and show how clinical staff responded. They give an insider something much more concrete than a general complaint about pressure to increase revenue.

Why the Therapy Minutes and Assessment Date Mattered

Under the historical RUG payment system, therapy minutes and disciplines helped determine a resident’s payment category and the nursing home’s daily Medicare rate. The complaint described the Ultra High category as requiring at least 720 minutes a week from at least two therapy disciplines. A scheduling decision could therefore affect both the care delivered and the rate billed.

The complaint gave a specific example from November 2014. A resident had received 690 minutes of therapy, below the Ultra High threshold. The whistleblower alleged that the assessment date moved a day later so additional treatment would fall within the shifted seven-day period and qualify the resident for the higher category. The payment window allegedly moved to accommodate the target.

Discharge timing allegedly served the same purpose. For another resident, the complaint said a nursing review found no clinical work left for therapy to address. Yet treatment allegedly continued. The regional director allegedly chose a Monday discharge from therapy over Sunday to preserve another reimbursable day and an assessment at the Very High rate, avoiding a change-of-therapy reassessment that would lower the category.

These were historical therapy-minute incentives. Medicare’s skilled nursing payment system changed to the Patient Driven Payment Model on October 1, 2019. The replacement model bases payment on patient characteristics, including diagnoses and function, rather than therapy-minute groups. Misstating those characteristics can change the payment, which makes the connection between the clinical chart, the assessment and the bill just as relevant.

What Evidence Is Needed to Prove Fraud?

For this kind of therapy case, the evidence connects what the resident needed and received to what the facility represented to Medicare, who changed it, and the resulting payment. We examine that connection with the insider who knows the treatment and billing workflow.

The complaint identified a particularly useful business record: Medicare A Logs generated from Casamba, the electronic system. These facility reports showed residents’ daily RUG levels and the distribution across payment categories. The whistleblower alleged that upper management and rehabilitation directors had access, and that facility directors emailed the logs to the regional director before weekly calls. The reports linked the treatment targets to management’s review of results.

We bring the clinical account, the management instructions and the payment records together, so the case explains how the alleged practice reached Medicare.

The Separate Encore Rehabilitation Services Case

Encore Rehabilitation Services LLC agreed to pay $4.03 million in a separate settlement announced April 10, 2020, involving three Michigan facilities. The allegations included unnecessary or unskilled therapy and concurrent or group treatment recorded as individual therapy. A five-year integrity agreement accompanied that resolution.

That parallel shows another way a therapy record can misrepresent the service: the claimed treatment format can be wrong as well as the amount or need.

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. For a healthcare insider, knowledge of who overrode a treatment decision can be central to explaining how the false claim arose.

When Your Treatment Plan Was Overruled

If you saw health care decisions rewritten to meet therapy targets, tell our whistleblower experts what changed and who directed it. We work beside you to build the case around your clinical knowledge and the billing evidence, and bring in Medicare fraud whistleblower lawyers who understand contract rehabilitation. From the first conversation through the case, you have partners who understand why the difference between the chart and the schedule matters.