This past June, Signature HealthCARE, provider of long-term nursing care based out of Kentucky, settled with the U.S. Department of Justice on allegations of upcoding. In the settlement, Signature will pay $30 million of the $230 million suit to move forward without an admission of guilt.
According to Kimberly Marselas of McKnight's Long-Term Care News, the complaint "...accused Signature of pushing patients into the ultra-high therapy category, often hitting the 720-minute per week exactly to maximize reimbursements. According to the Justice Department, Signature discouraged care above the threshold and pressured therapists to complete planned minutes even when patients were sick or disinterested."
Upcoding falls into the category of medical billing fraud that includes:
- Excessive services
- Excessive billing
- Falsifying records
Upcoding occurs when a healthcare provider submits an inaccurate billing code to an insurance company for reimbursement. The provider then receives an inflated reimbursement relative to the services provided. Upcoding is illegal under the federal False Claims Act (FCA).
False Claims Act
"The False Claims Act is a federal law that allows the federal government, and even private individuals, to sue those making fraudulent government claims. To be liable under the FCA, those violating the law must have some form of knowledge or deliberate ignorance of the falsity of their claim, so an inadvertent clerical mistake isn't enough."
One of the most important features of the FCA is the qui tam provision, which gives ordinary people the ability to report the potential crime and collect a portion of any potential settlement.
Two former Signature employees filed a federal whistleblower lawsuit on their former employer back in 2014. That lawsuit is what led to the investigation and settlement in this case. For more information about reporting, click here.