Encore Rehabilitation, DOJ Reach $4M Settlement in False Claims Act Case

Encore Rehabilitation Services on Friday publicly agreed to pay $4 million to settle federal allegations that the contract rehab provider violated the False Claims Act.

The Department of Justice had accused the Farmington Hills, Mich.-based rehab operator of “causing three Michigan skilled nursing facilities to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary, or skilled.”

“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,” deputy assistant attorney general Michael Granston said in a statement released by the DOJ.

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The settlement covered activities that allegedly occurred between 2010 and 2018.

In addition to the $4 million payout, Encore voluntarily agreed to enter into a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), which will require the therapy firm to perform a risk assessment and internal review process.

As is common in False Claims Act cases, the settlement closes the investigation without Encore admitting fault or the government making a determination of liability; the DOJ’s claims thus legally remain allegations only.

Encore cooperated with the government’s investigation for the last four years, a spokesman said in an e-mail to SNN, ultimately deciding “it was in the company’s best interests” to reach a deal.

“The settlement amount of approximately $4 million is considerably less than payments required to resolve cases involving other providers in the industry, and allows Encore to avoid further costs and management distraction,” the spokesman said.

The CIA will not affect Encore’s operations, according to the spokesman; the company currently serves 700 post-acute care sites across 34 states.

“Through this process, Encore has enhanced and reinforced its already robust compliance functions and capabilities,” the spokesman said. “Encore looks forward to continuing to provide comprehensive, clinically necessary care to patients and industry leading capabilities and services to customers.”

Under the qui tam provisions of the False Claims Act, the four former Encore employees who alerted the government to the alleged misconduct will receive an undisclosed portion of the settlement.

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