Signature Healthcare, a Kentucky-based company that operates over 100 skilled nursing facilities in multiple states, recently reached an agreement to pay more than $30 million to settle allegations that it submitted false claims to Medicare for medically unnecessary rehabilitation therapy services.

The government’s allegations centered on claims that Signature set unrealistic financial goals and implemented policies of scheduling patients for therapy services based on the highest reimbursement level regardless of patients’ individual needs or the clinical necessity of scheduling such services. The allegations were first brought in a lawsuit filed under the False Claims Act’s qui tam (or whistleblower) provisions by two former Signature employees who previously worked at a Signature facility in Tennessee. Those whistleblowers will receive a percentage of the money Signature pays to the government.

According to the government, Signature’s improper practices included: (1) ordering the highest reimbursed therapy services without relying on individual patient evaluations to determine the most suitable treatment option based on each patient’s specific needs; (2) providing only the minimum amount of time required to bill a service at the highest reimbursement level and discouraging additional therapy beyond the minimal threshold; and (3) improperly pressuring patients and therapists to finish enough therapy minutes to qualify for the highest reimbursement even when patients were not well enough or unwilling to participate in such therapy activities.

In addition to the $30 million settlement, Signature also agreed to enter a Corporate Integrity Agreement with HHS-OIG. Under that agreement, Signature will be required to implement extensive compliance procedures and observe strict reporting requirements with HHS-OIG for the next five years in order to continue participating in federal health programs.

The attorneys at Chilivis Grubman represent healthcare providers of all types and sizes in connection with government investigations, False Claims Act litigation, and a wide variety of regulatory and compliance matters, including those involving the Stark Law, Anti-Kickback Statute, and False Claims Act. For any questions, or if we can assist you in connection with such a matter, please contact us at (404) 262-6505 or