Nursing Home Operator Pays $16.7 Million to Settle Medicare Fraud Allegations

A Los Angeles skilled nursing home operator will pay $16.7 million to settle allegations with the Department of Justice that it submitted false claims to Medicare for rehabilitation therapy services that were unreasonable or unnecessary. The settlement with Longwood Management Corp. covers conduct that took place between 2008 and 2012 at six San Fernando Valley facilities: Alameda Care Center in Burbank, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital in Granada Hills, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center and West Hills Health & Rehab Center. The settlement also covers conduct that occurred from 2006 through 2014 at 21 facilities throughout the Los Angeles region, including two in Studio City. Longwood is alleged to have knowingly submitted or caused the submission of false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents, the highest level of Medicare reimbursement for skilled nursing facilities. U.S. Attorney Nick Hanna, of the Central District of California, said that Longwood’s business model called for substantial revenue from Medicare, and the company pressured therapists to provide unnecessary services when targets were not met. “This case demonstrates the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers,” Hanna said in statement. Three whistleblowers, who brought lawsuits against Longwood that are partially resolved with the settlement, will collectively receive $3 million of the settlement proceeds.