How to Report a Skilled Nursing Facility fraud (SNF fraud)

On July 22, 2016, Associated Press reported that the Federal authorities have finally charged three people in an alleged $1 billion health care fraud scam, accusing them of using their network of more than two dozen nursing homes in Miami to bilk the taxpayer-funded Medicare program.

According to the indictment posted at the Whistleblower Lawyer News,

Esformes has operated a network of over 30 skilled nursing homes and assisted living facilities which gave him access to thousands of Medicare and Medicaid beneficiaries. Though many of these beneficiaries did not qualify for skilled nursing home care or for placement in an assisted living facility; however, Esformes and his co-conspirators nevertheless admitted them to Esformes Network facilities where the beneficiaries received medically unnecessary services that were billed to Medicare and Medicaid. They are also alleged to have further enriched themselves by receiving kickbacks in order to steer these beneficiaries to other health care providers (including the community mental health centers and home health care providers) who also performed medically unnecessary treatments that were billed to Medicare and Medicaid.

This is only one of the many cases that violated the False Claims Act (PDF file).


Medicare beneficiaries frequently need more time or services in the rehab center until they regain health stability, this is when skilled nursing facilities have taken advantage of fraudulent billing.

These sample schemes are in violation of the False Claims Act:

The Upcoding Schemes

A scheme used by Skilled Nursing Facilities (SNFs) where the patients are placed into the highest Resource Utilization Group category. This kind of scheme reimburses the rehabilitation center with the Medicare money. The beneficiaries receive unnecessary therapy that is being billed to the government. This type of excessive therapy is medically inappropriate and dangerous to the patients.

There is also another scheme called “upcoding” in which fraudulent skilled nursing facilities typically uses inappropriate procedure codes for the items or services rendered. This is a type of billing fraud by the use of excessive procedure codes to be reimbursed at a higher rate.

For example, if they are receiving 720 minutes of therapy, the patient is then placed under the ultra-high category to receive the maximum allowable compensation. When this happens, SNFs will have to provide inappropriate therapy to patients in order for them to receive the maximum amount of Medicare payments for each patient.

Some schemes may also include:

  • Unnecessary and Unperformed Therapies
  • Presumptive or Estimating Therapies

The Service Schemes

These is the simplest and common form of violation of the False Claims Act were the SNFs may accomplish by reporting services or medications that are not provided to the beneficiaries. This kind of schemes involves unperformed or unnecessary services.

For example, SNFs report services that have not been provided and have insufficient staffing levels, then the claims submitted to Medicare and Medicaid.

Some schemes may also include:

  • Falsification of Medical Records Without Providing Proper Medication
  • Inflation of Recorded Hours for Service and Medication Reimbursements

The Kickback Schemes

The Kickback Laws prohibits both the receipt and payment of improper referral fees which most SNFs can be prosecuted for the issuance of receipts that indicates improper services and benefits while in a referral relationship that is prohibited by Medicare or Medicaid.

These improper relationships may include the provided contracts for lucrative Medicare and Medicaid patient transports in exchange for receiving free or heavily discounted ambulance transport for other patients.

Another example, the salary of doctors serving as Medical Directors can be an improper kickback if it is used to compensate them for patient referrals.

Some schemes may also include:

  • Billing Initial Evaluations as Therapy
  • Boosting the Amount of Therapy

What You Should Do If You Have Information About the Violation of the False Claims Act or the Abuse Against the Medicare and Medicaid Programs

The Skilled Nursing Facility Medicare Fraud can result in a sizeable Whistleblower reward. You must first identify the inappropriate schemes. These schemes may summarize the following:

  • Billing the non-billable expenses such as medicines, therapies, and treatments
  • Billing the non-FDA approved prescriptions
  • Double billing for services, treatments, and therapies
  • Billing for Medicaid and Medicaid or any related services that were not performed or delivered
  • Running laboratory tests that are not necessary or more that required
  • Falsifying extra hours of employees to maximize reimbursement
  • Falsifying records to inaccurately portray the facility’s performance
  • Billing for an expensive equipment more than what is actually being used
  • Billing expensive illness and/or treatments more than what is accurate
  • Prescription rebate/reimbursement fraud
  • Forging a physician’s signature
  • Declaring a broken equipment as operational
  • Billing through the doctor’s rate for a work performed by a nurse or other medical personnel
  • Extra services performed in order to attain the highest reimbursement rather than patient appropriately needed
  • Receiving kickbacks for certain contracts and/or through illegal marketing of prescriptions, treatments or services

If you have suspected inappropriate schemes described above, you may contact Philadelphia and New Jersey field offices of the Office of Inspector General, U.S Department of Health and Human Services.

Field Offices:

Philadelphia :245-596-6796

New Jersey: 212-264-1691

Or contact and/or write:


Department of Health and Human Services

Office of the Inspector General

P.O. Box 23489

L’Enfant Plaza Station

Washington, D.C. 2006-3489

If you need an assistance on how to report any violation of the False Claims Act you may contact our attorneys to discuss the drawbacks and benefits in reporting these schemes to the government. We may represent you and handle complex Medicare and Medicaid Fraud Cases. In addition, we will protect your rights under the Whistleblower Protection provisions of the False Claims Act.