The US Attorney’s Office has filed a joint complaint with the Massachusetts Attorney General’s Office under the federal and Massachusetts False Claims Acts against 19 skilled nursing facilities (SNFs) in Massachusetts and Connecticut and their present and former management companies, RegalCare Management Group, LLC and RegalCare Management 2.0 (together “RegalCare”); RegalCare’s owner, Eliyahu Mirlis and an executive, Hector Caraballo; and RegalCare’s therapy consultant, Stern Therapy Consultants (Stern). The complaint alleges that, between 2017 and 2023, RegalCare—at the direction of Mirlis and Caraballo and aided by Stern—fraudulently caused the submission of claims to Medicare and Medicaid (via MassHealth and its managed care organizations) for medically unreasonable and unnecessary services to patients of RegalCare’s SNFs. The defendants’ scheme allegedly resulted in millions of dollars in damages to the Medicare and Medicaid programs.
Specifically, the complaint alleges that RegalCare, at Mirlis’ direction, systematically caused Medicare to be billed for the highest level of skilled rehabilitation therapy services at RegalCare’s SNFs in Massachusetts and Connecticut, despite patients not clinically needing those services. Caraballo facilitated Mirlis’ plan by ensuring that RegalCare’s patient records supported billing for such services—including altering and amending records despite knowing he was not authorized to do so at his licensing level, without having assessed or spoken to the patients, and often without having spoken to clinicians about the changes he personally made. The United States also alleges that RegalCare, through Mirlis and Caraballo, improperly directed RegalCare’s third-party billing company to bill Medicare for the highest-level skilled rehabilitation therapy services before the underlying necessary clinical documentation was even complete.