Nineteen nursing homes in Massachusetts and Connecticut have been named in a joint complaint alleging systematic fraudulent billing of Medicare and Medicaid for unnecessary care.

The facilities, along with present and former management companies RegalCare Management Group, RegalCare Management 2.0, owner Eliyahu Mirlis and executive Hector Caraballo, and therapy company Stern Therapy Consultants were involved in alleged fraud, according to the complaint filed by the U.S. Attorney’s Office and Massachusetts Attorney General’s Office.

Between 2017 and 2023, RegalCare, at the direction of Mirlis and Caraballo and aided by the therapy company, fraudulently caused the submission of claims to Medicare and Medicaid for medically unreasonable services to patients in the 19 facilities, the complaint alleges.

The scheme resulted in millions of dollars in damages to the Medicare and Medicaid programs, the Attorneys’ offices claim.

Patients were billed for the highest level of skilled rehabilitation services despite not clinically needing those services. Clinical records were altered to match the high level of care by Caraballo, but he didn’t have the licensing level authorization to do so, and hadn’t spoken to the patients or clinicians about the changes he allegedly made.

Stern Therapy Consultants conspired with RegalCare in the submission of fraudulent claims to Medicare, scheduling therapists to provide unnecessary services contrary to patients’ medical needs, the complaint contend.

Stern therapists that refused to provide unnecessary or unreasonable services were allegedly threatened with employment action against them, pressuring these therapists to capitulate.

Skilled Nursing News reached out to RegalCare and Stern regarding the lawsuit, but didn’t hear back as of press time.

The governments filed their complaint in a lawsuit filed by a whistleblower, per the qui tam provisions of the False Claims Acts. A private citizen can sue on behalf of the United States or Massachusetts and share in any recovery, according to these provisions. The United States and Massachusetts are allowed to intervene in the lawsuit under the provisions as well.