Skilled Nursing Facility Medicare Fraud Whistleblower

What Happened: The Safire Nursing Home Medicare Fraud Settlement

Safire Rehabilitation of Northtowns, LLC, Safire Rehabilitation of Southtowns, LLC, and Williamsville Suburban, LLC agreed to pay $9,000,000 to resolve allegations arising under the Federal False Claims Act and the New York False Claims Act for false claims submitted to Medicare and Medicaid. Of that total, $5.4 million constitutes the federal portion of the recovery and $3.6 million constitutes a recovery for State Medicaid programs. The alleged fraud period ran from approximately January 1, 2015 through approximately October 1, 2019. Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

The case that brought this skilled nursing facility Medicare fraud whistleblower matter to light is captioned United States and the State of New York ex rel. Ciavarella v. Safire Rehabilitation of Northtowns, LLC., et al., No. 20-cv-07078-EAW (W.D.N.Y.). The claims resolved by the settlement are allegations only and there has been no determination of liability.

What the Government Alleged: Four Patterns of Skilled Nursing Facility Fraud

The United States alleged that Safire fraudulently inflated reimbursements from Medicare and Medicaid through four distinct patterns of conduct, each targeting the billing of skilled rehabilitative therapy services that Safire allegedly knew were not reasonable or necessary, not supported by medical record documentation, not documented as provided, or not provided at all.

Scheduling Therapy Around Insurance Reimbursement, Not Medical Need

The government alleged that Safire scheduled skilled rehabilitative therapy and set therapy goals for residents based on the reimbursement policies of the residents’ insurer, rather than medical need, resulting in Medicare and Medicaid beneficiaries being scheduled for more skilled rehabilitative therapy than was necessary. This pattern — letting billing considerations drive clinical decisions — is a recurring hallmark of SNF therapy fraud.

Pressuring Therapists and Residents to Continue Unwanted Therapy

The government further alleged that Safire pressured treating therapists to provide therapy even when those therapists recommended against it, and pressured residents to attend therapy sessions even after the residents repeatedly refused to participate. These allegations describe a facility allegedly overriding both clinical judgment and patient choice in order to sustain billable therapy volume.

Manufacturing and Altering Medical Records and Therapy Referrals

The government alleged that Safire manufactured and/or altered therapy referrals and medical records to justify billing for unreasonable and unnecessary therapy. Fabricated or altered documentation is among the most serious categories of alleged conduct in False Claims Act cases because it can conceal the underlying fraud from routine audits and program integrity reviews.

The Whistleblower’s Role: How a Qui Tam Lawsuit Drove This Case

The civil settlement is the result of a matter brought under the qui tam, or whistleblower, provisions of the False Claims Act, with the relator identified in the case caption as Ciavarella. The relator will receive a share of the federal recovery. Without an insider with direct knowledge of the alleged conduct, cases involving manipulated therapy schedules and altered records are difficult for the government to detect and pursue on its own.

Under 31 U.S.C. § 3730, a person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The complaint is filed under seal while the government investigates. If the government intervenes and the case resolves, the relator may receive between 15 and 25 percent of the proceeds of the action or settlement. If the government declines to intervene and the relator proceeds, that share may be between 25 and 30 percent. The statute also provides anti-retaliation protections for employees who are discharged, demoted, suspended, threatened, harassed, or otherwise discriminated against because of lawful acts taken in furtherance of an action under the False Claims Act.

What This Settlement Signals for Skilled Nursing Facility Medicare Fraud Enforcement

This $9,000,000 settlement reflects coordinated enforcement by the U.S. Attorney’s Office for the Western District of New York, the U.S. Department of Health and Human Services Office of Inspector General, and the New York State Attorney General’s Office Medicaid Fraud Control Unit — a combination of federal and state agencies that signals how seriously the government treats skilled nursing facility Medicare fraud. U.S. Attorney Michael DiGiacomo stated: “Medicare and Medicaid fraud drains taxpayer funds and weakens these vital government programs.” Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

The settlement is also described as part of the Trump Administration’s Task Force to Eliminate Fraud, and the announcement references the April 7 creation of the National Fraud Enforcement Division, which is focused on investigating and prosecuting those who commit fraud against the American people. These institutional developments suggest that enforcement activity in SNF therapy billing fraud could intensify. Insiders at skilled nursing facilities, rehabilitation companies, or hospice providers who recognize similar patterns should understand that the government is actively pursuing these matters.

Warning Signs: Patterns SNF and Rehabilitation Employees May Recognize

Employees who recognize these patterns at their own facility may have grounds to bring a qui tam claim. Our attorneys who handle skilled nursing facility and hospice fraud matters can help evaluate whether what you have witnessed may constitute actionable fraud. The following patterns closely track what the government alleged against Safire.

Therapy Minutes or Units Set to Hit Reimbursement Thresholds

One warning sign is billing staff or directors of rehabilitation setting therapy targets based on Medicare reimbursement levels rather than what a treating clinician recommends. Employees who have observed therapy schedules being built around reimbursement tiers — or who have been told to document minutes that were not actually provided — may have direct, firsthand knowledge of this type of fraud.

Clinicians Told to Provide or Document Services They Believe Are Unnecessary

A second warning sign is therapists, nurses, or other clinical staff being instructed to continue providing therapy over their own professional objections, or over a patient’s repeated refusals. Staff who have been pressured to sign off on services they did not believe were clinically warranted, or who have witnessed records being changed to support billing that did not reflect actual care, may hold evidence that is highly valuable to a government investigation. Under 31 U.S.C. § 3730, the False Claims Act provides anti-retaliation remedies for employees who face adverse action because of protected activity in connection with a qui tam matter.

If practices like these look familiar from your own workplace, you can discuss what you have seen with a Price Armstrong attorney confidentially and at no cost. Call (888) 670-9542 or use the secure evaluation form below.

If practices like these look familiar from your own workplace, you can discuss what you have seen with a Price Armstrong attorney confidentially and at no cost. Call (888) 670-9542 or use the secure evaluation form below.

Frequently Asked Questions

What is a qui tam lawsuit in the context of skilled nursing facility Medicare fraud?

A qui tam lawsuit is a civil action brought by a private person — called a relator — on behalf of the United States under 31 U.S.C. § 3730, which provides that a person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The complaint is filed under seal, the government investigates, and the relator may share in any recovery. The Safire settlement illustrates how an insider’s firsthand knowledge can drive a $9,000,000 resolution that the government might not have reached on its own. Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

How much could a whistleblower receive from a skilled nursing facility Medicare fraud case?

Under 31 U.S.C. § 3730, a relator in a case where the government intervenes may receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement. In a case where the government declines to intervene and the relator proceeds, the relator may receive an amount the court decides is reasonable, but not less than 25 percent and not more than 30 percent. In the Safire matter, the relator will receive a share of the $5.4 million federal portion of the recovery; the exact amount has not been stated in the public announcement. Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

What should I do if I work at a nursing home and suspect Medicare billing fraud?

If you work at a skilled nursing facility or rehabilitation company and have observed therapy being scheduled around reimbursement targets, clinicians being pressured to provide unnecessary services, residents being enrolled in therapy after refusing, or records being altered to support billing, you may have information relevant to a False Claims Act claim. Speaking with an attorney who handles these matters is a practical first step; the False Claims Act’s seal provision means your identity can be protected while the government evaluates the information. No outcome can be assured, but the statute provides a framework under which insiders with direct knowledge may be eligible to share in any government recovery.