Farmington Hills rehab company settles ‘whistleblower’ suit

A Farmington Hills firm that provides rehabilitation services to health care facilities in 34 states will pay $4.03 million to resolve allegations regarding false claims to Medicare.

Encore Rehabilitation Services LLC (Encore) allegedly violated the False Claims Act by knowingly causing three Michigan skilled nursing facilities to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary or skilled, according to an April 10 Department of Justice press release.

The settlement resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Linda Anderson, Reza Saffarian and Audrey Theile, and Adam LaFerriere, former Encore employees. The False Claims Act permits private parties to file suit on behalf of the United States and to share in any recovery. The amount to be recovered by the private parties in this matter has not been determined.

“Today’s settlement reflects our continuing efforts to protect patients and taxpayers by ensuring that the care provided to beneficiaries of government-funded healthcare programs is dictated by clinical needs, not a provider’s fiscal interests,” said Deputy Assistant Attorney General Michael Granston of the Department of Justice’s Civil Division. “Rehabilitation therapy companies provide important services to our vulnerable elderly population, but they will be held to account if they knowingly provide patients with unnecessary or ineligible services.”

This settlement resolves allegations that Encore’s policies and practices at three Michigan skilled nursing facilities “resulted in the provision of unreasonable, unnecessary, or unskilled rehabilitation therapy or the recording of therapy minutes as individual therapy when concurrent or group therapy was actually provided,” according to the release.

The facilities involved were Autumn Woods Healthcare Facility in Warren, the Bay Shores Senior Care and Rehab Center in Bay City, and MediLodge of Yale.

“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “We are committed to working with our federal partners to protect both vulnerable Michiganders and these helpful healthcare programs.”

Encore also entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Health and Human Services – Office of Inspector General (HHS-OIG) that requires, among other things, implementing a risk assessment and internal review process designed to identify and address evolving compliance risks. The CIA requires training, auditing, and monitoring designed to address the conduct at issue in the case.