Worcester nursing facility sued by U.S. attorney over Medicaid fraud scheme
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Regalcare at Worcester is one of 10 Massachusetts skilled nursing facilities named in the U.S. Attorney's lawsuit.
A Worcester skilled nursing facility is being sued by the U.S. Attorney’s office for its part in alleged systematic fraudulent billing of Medicare and Medicaid between 2017 and 2023.
Regalcare at Worcester was named in the Tuesday lawsuit, along with 18 other skilled nursing facilities in Massachusetts and Connecticut. The current and past owners of the nursing facilities, New Jersey-based RegalCare Management Group and RegalCare Management 2.0, were also named in the lawsuit, along with Regalcare’s CEO Eliyahu Mirlis, its New York-based therapy consultant firm Stern Therapy Consultants, and Stern’s executive Hector Caraballo, , according to a Tuesday press release from the U.S. Attorney's Office, District of Massachusetts.
Neither Mirlis, Caraballo, nor Regalcare of Worcester immediately responded to WBJ’s request for comment.
The suit alleges the skilled nursing facilities, under the direction of Mirlis, caused millions of dollars in damages to Medicaid and Medicare programs by fraudulently causing Medicare to be billed for the highest amount possible for therapy services not clinically required for patients, according to the U.S. Attorney's Office.
The lawsuit asserts the medically unreasonable and unnecessary services, including physical, occupational, and speech pathology therapists, were allegedly part of a scheme orchestrated by Mirlis and Caraballo on behalf of Reglcare and Stern Therapy.
The scheme involved Caraballo ensuring RegalCare’s patient records were altered and amended to support the inflated claims while both defendants had RegalCare improperly directed the company’s third-party billing firm to bill Medicare prior to underlying necessary clinical documentation being completed.
For example, the suit claims when Regalcare patients either did not want to or could not participate in certain therapies, Stern’s management required therapists to document the time spent with patients, at times up to 45 minutes, without explaining the type, manner, and length of education.
Furthermore, Stern managers allegedly threatened employment consequences to therapists who refused to provide services they considered unnecessary or unreasonable.
“As alleged, these defendants drained Medicare and Medicaid of millions of dollars and put vulnerable patients at risk – making them undergo unnecessary, and sometimes painful, services,” U.S. Attorney Leah Foley said in the release. “When facilities prioritize profits over patient well-being, they endanger those in their care and undermine the integrity of our healthcare system. This office will continue to hold accountable those who exploit federal healthcare programs at the expense of patients and taxpayers alike.”
Between April 1, 2018 and Sept. 30, 2023, Regalcare of Worcester was paid $9 million by MassHealth directly in fee-for-service claims, the most of the 10 Massachusetts skilled nursing facilities named in the lawsuit. The location was also paid $385,361 indirectly through its managed care entity, according to the lawsuit.
The lawsuit did not state how much of these funds were being alleged as fraudulent.
Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.
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