Signature HealthCARE will pay more than $30 million to resolve allegations that it violated the False Claims Act (FCA) by knowingly submitting false claims to Medicare for rehabilitation therapy services.
The settlement resolves allegations leveled in a lawsuit by Kristi Emerson and LeeAnn Tuesca, former Signature therapy employees, filed in federal court in Nashville, Tenn., and an investigation conducted by the U.S. Attorney’s Office for the Northern District of Georgia.
Signature will pay $30 million plus interest at 2.375% from November 9, 2017, along with contingency payments of up to $5 million. Under the settlement agreement, the company will make its first quarterly payment of $1 million plus interest accrued from the November date within 10 days of the effective date of the agreement.
Emerson and Tuesca’s lawsuit was filed under the whistleblower, or qui tam, provisions of the FCA, and as a result, they will receive a portion of the recovered funds.
“This settlement allows us to move forward in serving our residents and families with quality health care and a commitment to compassion,” Joe Steier, president and CEO of Signature said in a statement provided by the company to SNN. “We worked with the government over the past year to get us here. Resident care remains our first priority, and therapy services are and remain an important part of that care.”
Corporate practices faulted
The lawsuit alleged that Louisville, Ky.-based Signature had a corporate-driven practice of billing Medicare for unnecessary and non-provided therapy, and provided kickbacks through not billing Part B patients for co-pays, according to the settlement agreement.
Signature allegedly submitted false claims to Medicare Part A for unnecessary rehab therapy provided at its skilled nursing facilities from January 11, 2011, through September 30, 2015. In those claims, Medicare Part A was billed for the patient’s stay for at least 30 days at the Ultra High Resource Utilization Group (RUG), the highest reimbursement level, the agreement said.
The government argued that Signature’s corporate practices and policies encouraged unnecessary therapy that had no relation to the clinical needs of patients and led to false claim submissions.
Those practices included setting budgets predicated on billing the majority of Medicare Part A patients at the Ultra High RUG level, presumptively placing patients in that reimbursement level, planning therapy to meet the minimum required minutes to bill at Ultra High RUG, and pressuring therapists and patients to complete planned minutes of therapy, among other practices.
TennCare, Tennessee’s Medicaid program, requires physicians to certify that patients need care at a SNF on pre-admission evaluations (PAEs); the agreement settles claims that Signature submitted forged certificates of patient need to the program.
Restructuring considered
Signature recently reached major restructuring agreements with its two major landlords, Irvine, Calif.-based Sabra Health Care REIT (Nasdaq: SBRA) and fellow real estate investment trust (REIT) Omega Healthcare Investors (NYSE: OHI), which is based in Hunt Valley, Md.
Signature owns and operates about 115 SNFs in Alabama, Florida, Georgia, Indiana, Kentucky, Maryland, North Carolina, Ohio, Tennessee, and Virginia.
Written by Maggie Flynn
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