The Justice Department has intervened in three False Claims Act lawsuits and filed a consolidated complaint against HCR ManorCare alleging that ManorCare knowingly and routinely submitted false claims to Medicare and Tricare for rehabilitation therapy services that were not medically reasonable and necessary.

ManorCare is one of the nation’s largest healthcare providers, operating approximately 281 skilled nursing facilities (SNFs) in 30 states.

The government’s complaint alleges that ManorCare, which is owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients.

ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments.

ManorCare also allegedly increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged.

The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.

The False Claims Act permits the government to intervene in such lawsuits, as it has done in these cases.

A defendant that violates the False Claims Act is liable for three times the government’s losses plus civil penalties.