Wake Forest Wilkes Medical Center: Missing Support for Therapy Claims Across an Acquisition

In the Wake Forest Wilkes Medical Center therapy fraud case, Wake Forest University Baptist Medical Center agreed to pay $754,585 over allegations of unsupported Medicare claims for physical and occupational therapy at the Wilkes Medical Center Skilled Nursing Unit in Wilkesboro, North Carolina. The claims spanned the hospital’s acquisition. For someone who knows the therapy department or its billing, that puts the treatment records and the decisions on both sides of the sale at the center of the story.

The Justice Department alleged that Wilkes Medical Center billed Medicare for therapy its records did not support. In the government’s account, taxpayers paid claims without the clinical support Medicare requires.

What Are the Documentation Requirements for Skilled Nursing Facilities?

Skilled nursing facility documentation must support the therapy billed to Medicare and why the patient needed it. The Justice Department stressed both documentation and medical necessity in announcing the Wilkes settlement.

The Medicare Benefit Policy Manual’s skilled nursing chapter describes care that requires professional skill, including otherwise routine services made skilled by a patient’s complications. The practical question for a therapy insider is what the notes show about that patient’s needs and the care delivered. A treatment entry has to mean something beyond a slot filled on a schedule.

For this kind of documentation case, we examine the connection between the clinical account and the claim: what treatment the record describes, who furnished it, and what the facility represented to Medicare. We compare the orders, treatment notes, assessment and bill for the same patient and dates.

The Claims Began Before the Acquisition

Wake Forest acquired Wilkes Medical Center, including its skilled nursing unit, on July 1, 2017. The government’s stated claim period ran from January 1, 2015 through September 30, 2019.

Those dates matter to anyone who worked through the transition. We would examine who directed therapy, who maintained the supporting records and who controlled billing during each part of the period. The name on the settlement alone cannot answer those questions. Contracts, payroll records and billing responsibilities help put the decisions back in the hands of the people who made them.

Another therapy resolution makes the acquisition issue concrete. In the Select Medical and Encore GC Acquisition settlement, the Justice Department alleged that therapy practices caused nursing facilities to bill for unreasonable, unnecessary or unskilled services. The department expressly placed that conduct before Encore’s acquisition. Select was the therapy provider’s former parent, and Encore was its successor. That history shows why the dates of the services and the roles behind the claims deserve as much attention as the company signing the settlement.

What Are the Medicare Billing Guidelines for Skilled Nursing Facility Care?

Medicare Part A skilled nursing payment depends on covered skilled care and the applicable patient assessment. Therapy is included in the facility’s bundled payment. Medicare pays the skilled nursing facility, while its contract determines what an outside therapy supplier receives.

That payment structure matters inside a hospital system. A hospital can house a skilled nursing facility with its own Medicare billing. Medicare’s consolidated billing framework makes the facility claim central even when someone else supplies the therapy. We examine the facility’s bill alongside the supplier’s records and contract to understand who represented what to Medicare.

The Wilkes claim period also belongs to the older payment system. The Patient Driven Payment Model took effect on October 1, 2019, after the covered period ended. It replaced the older therapy-minute payment system. Under that system, therapy volume helped determine the reimbursement category.

The replacement model bases classification on patient characteristics and clinical needs. The documentation still matters: the resident assessment supplies the payment classification on the bill. For someone working in therapy today, we examine whether the clinical notes support those assessment entries and the resulting claim.

A Whistleblower Started the Investigation

The government began investigating after a whistleblower filed a qui tam case under the False Claims Act. The Justice Department announced the settlement on February 28, 2023.

Which Is an Example of Billing Fraud?

Reporting therapy that was never delivered is one example of the conduct alleged in the separate Kindred/RehabCare case. The Justice Department’s account also described evaluation time or unskilled services counted as therapy and inflated treatment minutes. Those allegations show why the original clinical record matters when a payment system rewards reported treatment volume.

The contractor settled, and nursing facility customers separately settled allegations that they failed to prevent those practices. The billing relationship reached both sides of the therapy contract.

In another case, against Life Care Centers of America, the government’s complaint quoted a company hotline summary describing pressure to revise completed therapy records:

The alleged instruction was to keep asking until someone supplied the missing minutes. That gives an insider a concrete way to explain the difference between the treatment originally recorded and the treatment ultimately billed. At Wilkes, the government’s stated allegation concerned claims without supporting documentation. The common question is how the clinical account became the payment claim.

What Evidence Is Needed to Prove Fraud?

For a therapy-documentation case, the useful evidence connects the services, the records supporting them, the resulting Medicare claims and the people directing those decisions. We work with the insider to understand that connection, including what changed when ownership changed.

A clinician may understand the treatment notes and the health care the patient needed. An assessment or healthcare billing employee may understand how those notes fed the payment category. Someone responsible for staffing or contracts may know who employed the therapists and who supervised their work. Those different views can explain a claim that looks complete inside the billing system but loses its support when compared with the underlying care records.

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

You Know the Records Behind the Therapy Bill

If you saw therapy claims lose their connection to the clinical records, before or after an acquisition, speak with our whistleblower experts about what happened inside the department. We bring in Medicare therapy fraud whistleblower lawyers who understand facility and contractor billing, and stay beside you to build your strongest Medicare therapy whistleblower case.