The U.S. Justice Department on Friday announced that Buffalo-based Catholic Health System has agreed to pay $6 million dollars to settle a complaint alleging it billed federal health care programs for unnecessary services over a seven-year period.
The federal government says the claims resolved by the settlement remain allegations, with no liability having been determined. What the Justice Department alleges is that Catholic Health's subsidiary Home & Community Based Care program, previously known as Continuing Care, filed false claims to Medicare and Medicaid between January 2007 and December 2014.
At issue are services provided at long- and short-term skilled nursing care and post-acute care facilities including Father Baker Manor, St. Francis Williamsville and the McAuley Residence. The Justice Department alleges that Catholic Health billed federal programs for services that were not medically necessary.
"Essentially, in layman's terms, this involves a case of upcoding, where they're billing at a higher rate than the actual services required for the patients," said Acting United States Attorney James P. Kennedy, Jr.
"Catholic Health was basically submitting false claims for payment related to ultra-high resource utilization levels, when these claims were not supported by the medical documentation or were not medically necessary."
In a prepared written statement, Catholic Health disputes the government's opinion as to what is "medically unnecessary." While not admitting any wrongdoing, Catholic Health says it is paying the settlement to avoid litigation that would take years to resolve and prove costly to its internal and external resources.
As part of the agreement, Catholic Health will go under closer scrutiny of the Office of the Inspector General for the next five years. Kennedy calls it a corporate integrity agreement.
"It essentially provides for a certain level of oversight to be undertaken by Catholic Health," Kennedy said. "Essentially, they agree to abide by the terms of the agreement with the Inspector General and to follow appropriate billing practices."
Here is Catholic Health's full written statement: "Catholic Health has agreed to settle a lawsuit alleging the health system provided Medicare and Medicaid patients medically unnecessary physical and occupational therapy services. The suit involved services provided during the years 2007 through the first quarter of 2014 at three Catholic Health subacute rehabilitation facilities – Father Baker Manor, McAuley Residence, and St. Francis Home. In agreeing to the settlement, Catholic Health has admitted no liability or wrongdoing.
"The government’s case was based on findings of alleged overutilization in a small sample of cases. The government also relied on statistics indicating that rehabilitation services utilization at Catholic Health sub-acute rehabilitation facilities exceeded national averages. Determinations of the medical necessity of therapy services made years after care was provided are highly subjective, and Catholic Health does not agree with the government’s conclusions concerning the medical necessity of rehabilitation services provided at its facilities.
"Catholic Health maintains that therapy was provided pursuant to physician approved and monitored plans of care. Moreover, Catholic Health maintains 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.
"Catholic Health cooperated fully throughout the government’s three year investigation. Litigation of this matter would have gone on for years and consumed substantial internal and external resources. By agreeing to resolve this matter now, Catholic Health will instead direct those resources to continuing to provide patients the highest level of care.
"'These allegations were never about the quality of care or the outcomes our patients achieved,' said Leonardo Sette-Camara, Corporate Compliance Officer for Catholic Health. 'We believe the care provided was appropriate and enabled our patients to return home sooner than if they had received less intense therapy. Defending these types of subjective allegations of overutilization, however, requires an unsustainable and ultimately unacceptable allocation of financial and personnel resources.'
"Since the timeframe in question, Joyce Markiewicz was named President & CEO of Home & Community Based Care for Catholic Health in 2014. Upon taking over responsibility for the health system’s skilled nursing and subacute rehabilitation facilities, Markiewicz conducted a thorough review of each facility’s performance, improving processes and increasing management oversight to ensure they provide the highest quality care and service.
"Notably, Medicare’s Nursing Home Compare, which rates facilities on a variety of quality measures, currently awards both McAuley Residence and Father Baker Manor 5-star overall ratings, the highest rating possible. (St. Francis Home was sold in 2015 and is no longer part of Catholic Health)."
