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Can’t Sweep Fraud Under the Rug

Can’t Sweep Fraud Under the Rug

Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

While many frauds are perpetrated by an individual, some healthcare frauds are part of a larger scheme run by a network of individuals working together to line their own pockets with cash. Fortunately, whistleblowers do a great job of bringing wrongdoings to light and can help prevent further frauds from being committed.

Longwood Management Corporation (LMC) recently agreed to pay $16.7 million to settle claims against them alleging Medicare fraud. (LMC and their affiliates operate over two dozen skilled nursing facilities (SNFs) across California.) The allegations were brought forth by three whistleblowers – Judy Boyce, Benjamin Monsod, and Keith Pennetti. They were awarded $3 million to be shared between them as part of the lawsuit settlement. (Sometimes doing the right thing pays off, quite literally in this case.)

Benjamin Monsod was a nurse assessment coordinator at Longwood’s Montrose Healthcare Center between January 2010 and April 2012. Judy Boyce worked at the Golden Living Center in Kansas which was operated by Aegis who is also named in the whistleblower’s lawsuit. Boyce worked at Golden Living Center between 2004 and 2010 first as a Social Service Director, and later as the facility’s Executive Director. Keith Pennetti has been the Director of Operations for California at RPM Rehab center since 2012. Each whistleblower was in a unique position to detect and witness the fraudulent billings firsthand and could testify to the company’s alleged wrongdoings.

Boyce, Monsod, and Pennetti assert in their whistleblower lawsuits that Long Management Corporation pressured rehabilitation therapy specialists into upcoding the therapies they administered. (People can be convinced to do a lot of things when their job and livelihood is on the line.)

Upcoding is one of the most common forms of healthcare fraud in which a healthcare provider selects an inappropriate billing code for services rendered because it will increase the reimbursement they receive from Medicare. In this case the SNFs claimed patients required the highest level of rehabilitation therapy when they did not.

The lawsuit claims that the SNFs in question were fraudulently reimbursed at the highest rate per patient per day. Boyce, Pennetti, and Monsod claim that Longwood forced therapists to bill Medicare at the highest and most complex rates so that they could reach the high Medicare revenue targets they set in their business plan. (Longwood didn’t care about helping people, they cared about meeting their financial goals and putting money in their own pockets.)

SNF’s bill Medicare for rehabilitation therapy services provided based on seven different resource utilization group (RUG) levels, each with a different payment rate. The lawsuit alleges that SNFs billed based on what RUG level would be most profitable to them. This was accomplished by providing one type of therapy and billing for a different and more expensive kind, performing therapy that was not medically necessary, or falsely labelling a provided service as ‘therapy’. (The whistleblowers pulled the ‘rug’ out from under these fraudsters by exposing their misdeeds.)

Prosecutors claim that Longwood, Aegis, and affiliates defrauded Medicare between 2006 and 2016 by submitting false billing claims at over 25 SNF locations. Their settlement payment is not an admission of guilt, but is paired with a corporate integrity agreement which states that the SNFs named in the lawsuit will be closely monitored for the next few years.

Today’s Fraud of the Day comes from an article, “Three Whistleblowers Share $3 Million Award After Exposing Medicare Fraud at Longwood’s Skilled Nursing Facilities in California,” published by Whistleblower News Review on August 13, 2020.

California-headquartered Longwood Management Corporation and a large number of its affiliates have agreed to pay $16.7 million to settle Medicare fraud claims. Longwood’s alleged violations were brought to light by three whistleblowers, Judy Boyce, Benjamin Monsod, and Keith Pennetti, who will now share a $3 million award.

Longwood operates numerous skilled nursing facilities (SNFs) across California. According to two separate whistleblower lawsuits, over a period of nearly eight years, Boyce, Monsod, and Pennetti observed how the company pressured rehabilitation therapy specialists to bill the therapies they administered at the highest level of Medicare reimbursement.

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