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Skilled nursing care provider Catholic Health System, Inc., of Buffalo — some of whose facilities are currently rated highly by the federal government — has agreed to pay $6 million to resolve federal false-claims allegations against a subsidiary.
Catholic Health continues to dispute the allegations. Catholic Health said it agreed to the settlement with the U.S. Department of Justice (DOJ) because the cost of continuing to defend the case would have diverted more resources from patient care.
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The Office of the U.S. Attorney for the Western District of New York said that from 2007 through 2014, Catholic Health submitted, or caused to be submitted, false claims to Medicare for rehabilitation therapy services. Catholic Health was named a defendant in a whistleblower lawsuit brought under the False Claims Act. Whistleblowers can receive a portion of the proceeds of any settlement or judgment awarded against a defendant.
DOJ said services were administered at levels that were unreasonable, not medically necessary, and unsupported by the medical records.
“A healthcare system that is infected with dishonesty is susceptible to one of the worst afflictions known to mankind – human greed,” said Acting U.S. Attorney James P. Kennedy, Jr. on October 27. “Today’s settlement demonstrates our unwavering commitment to eradicating this cancer from our federal health care programs.”
DOJ said the claims resolved by the settlement are allegations only, and there has been no determination of liability.
Catholic Health said the government’s case was based on findings of alleged “overutilization” in a small sample of cases. It said the government relied on national averages and “highly subjective” determinations to evaluate claims.
In a news release, Catholic Health contended that while its rehabilitation patients received more intense therapy on average than patients at other facilities, its patients’ stays “were significantly shorter than national averages — meaning the more intense level of therapy services resulted in Catholic Health patients returning home faster.”
“These allegations were never about the quality of care or the outcomes our patients achieved,” said a Catholic Health spokesman. “We believe the care provided was appropriate. . . . Defending these types of subjective allegations of overutilization, however, requires an unsustainable and ultimately unacceptable allocation of financial and personnel resources.”
Catholic Health said two of the facilities involved in the case are currently rated 5 stars — the highest possible — by the U.S. Centers for Medicare and Medicaid Services. A third is no longer owned by Catholic Health.
The settlement was announced by DOJ on October 27, but this post was delayed to obtain a response from Catholic Health. The complete DOJ and Catholic Health news releases are available under the heading, “Litigation-Related Documents” on my website at https://wbeerman.com
