Stern Therapy Consultants, a New York long-term care therapy provider, has agreed to pay $315,000 to resolve allegations that, between Jan. 1, 2017 and Sept. 30, 2019, it conspired with RegalCare Management Group, LLC, RegalCare Management 2.0 (together RegalCare), RegalCare’s owner Eliyahu Mirlis and RegalCare executive Hector Caraballo, to cause the submission of false claims to Medicare for unnecessary skilled nursing facility therapy services. The settlement resolves allegations against Stern in a False Claims Act complaint the government filed in February 2025 against Stern, RegalCare, Mirlis and Caraballo.
As detailed in the settlement agreement, Stern admitted that at various times between January 2017 and September 2019, Stern’s therapists provided Ultra High Resource Utilization Group (RUG) SNF rehabilitation therapy services—the most comprehensive and highest reimbursing services—to RegalCare’s Medicare patients after documenting that patients should stop receiving such services, and after patients informed the therapists that they were physically unable to perform and/or refused to perform the services. Stern further admitted that its Senior Regional Director for the RegalCare facilities, who had no clinical experience and no clinical license, certified that a terminated former Stern employee completed Ultra High RUG therapy services for a RegalCare SNF patient without knowing or confirming whether the services were performed by the terminated former employee to justify billing for reimbursement.