The Southern District of New York and the U.S. Department of Health and Human Services have filed a healthcare lawsuit against 11 New York-based defendants. The lawsuit seeks damages and penalties for billing Medicare for unreasonable or unnecessary procedures at 11 skilled nursing facilities. They put profits ahead of the clients’ actual needs.
The lawsuit filed in White Plains federal court alleges that the facilities kept patients longer than necessary between January 2010 and September 2019 to maximize the amounts billed to Medicare for patient stays and not discharge them until the patient approached the maximum length allowed by Medicare. It also alleges that the facilities also placed patients on higher than necessary levels (as opposed to standard clinical needs) of rehabilitation therapy. Sometimes the clients did not even need skilled treatment.
The systematic action was led by Issac Laufer, who co-owns 10 of the 11 facilities and also operates the other facility through his Paragon Management SNF LLC. Laufer worked in conjunction with Tami Whitney, the company’s coordinator of the rehabilitation services for the facilities. The two told the staff to run up the bills and repeatedly pressured them to submit fraudulent billing for the services. Whitney reportedly devised strategies for “discharge prevention,” including phony balance tests to pass before discharge. The two also routinely put clients with Medicare on the highest billing level, using unnecessary physical, occupational or speech therapy requiring the services of a trained therapist.
If the government’s claims are true, actions by Paragon’s leadership are a clear violation of the False Claims Act. It put patients at risk and stole money from taxpayers. Fischer Legal Group has no ties to this case. However, we still want to highlight the ongoing need for vigilance in rooting out fraudulent Medicare billing by unscrupulous people in the healthcare industry.