Metro Detroit business to pay more than $4 million after violating False Claims Act

Business accused of causing nursing facilities to submit false claims

DETROIT – Encore Rehabilitation Services LLC (Encore) has agreed to pay $4.3 million to resolve allegations that Encore violated the False Claims Act by knowingly causing three Michigan skilled nursing facilities to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced Friday.

Encore is based in Farmington Hills and provides rehabilitation services to patients at over 600 health care facilities, including skilled nursing facilities, in over 30 states.

“Today’s settlement reflects our continuing efforts to protect patients and taxpayers by ensuring that the care provided to beneficiaries of government-funded healthcare programs is dictated by clinical needs, not a provider’s fiscal interests,” said Deputy Assistant Attorney General Michael Granston of the Department of Justice’s Civil Division. “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.”

This settlement resolves allegations that Encore’s policies and practices at three Michigan skilled nursing facilities resulted in the provision of unreasonable, unnecessary, or unskilled rehabilitation therapy or the recording of therapy minutes as individual therapy when concurrent or group therapy was actually provided.

The settlement relates to Encore’s alleged conduct at the Autumn Woods Healthcare Facility in Warren, between Sept. 1, 2012, and July 31, 2018, the Bay Shores Senior Care and Rehab Center in Bay City, for the period from April 1, 2013, to April 6, 2017, and MediLodge of Yale, for the period from Oct. 1, 2010, to April 6, 2017.

“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “We are committed to working with our federal partners to protect both vulnerable Michiganders and these helpful healthcare programs.”

Contemporaneous with the civil settlement, Encore entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG) requiring, among other things, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks. The CIA requires training, auditing, and monitoring designed to address the conduct at issue in the case.

“The submission of claims for unreasonable, unnecessary or unskilled rehabilitative services is improper and unacceptable,” said Special Agent in Charge Lamont Pugh III, HHS-OIG – Chicago Region. “The public expects that proper services will be provided and that tax payer dollars will not be wasted. OIG Corporate Integrity Agreements help to ensure that contracted providers, who have caused improper billing practices change their behavior.”