Skilled-nursing company, execs settle billing allegations for $30 million

A skilled-nursing facility company and two of its executives will pay $30 million to settle allegations that they charged the government for medically unnecessary rehabilitation therapy services.

The U.S. Justice Department alleged that North American Health Care sought payment from Medicare and Tricare for medically unnecessary services provided at its 35 skilled-nursing facilities from 2005 to 2011, a violation of the False Claims Act.

Under the terms of the settlement, North American Health Care will pay $28.5 million, while board Chairman John Sorenson will pay $1 million and Senior Vice President of Reimbursement Analysis Margaret Gelvezon will pay $500,000.

Sorenson allegedly reinforced the billing scheme that Gelvezon created at company facilities, according to the Justice Department.

“Skilled-nursing facilities such as NAHC treat some of the most vulnerable patients in the healthcare system,” said Brian Stretch, U.S. attorney in San Francisco. “These facilities, and the individuals who run them, will be held accountable when they provide treatment based on financial motivations instead of the patients’ needs.”

NAHC also entered a corporate integrity agreement with HHS’ Office of Inspector General as part of the settlement.