Thursday, April 23, 2015

ManorCare's Medicare Fraud Under Carlyle Ownership

Toledo Blade reported

Officials said the government has identified more than 1,200 false claims submitted by HCR ManorCare from Oct. 1, 2006, to May 31, 2012. 

Federal investigators say HCR ManorCare routinely subjected patients to unnecessary and potentially harmful treatments to increase reimbursement rates, based treatment decisions on reimbursement metrics rather than patient needs, and kept patients in skilled nursing facilities longer than was medically necessary
The Carlyle Group purchased ManorCare on December 24, 2007, roughly six months after the deal's announcement.  Their quality committee was unable to find unnecessary and potentially harmful treatments under the guidance of former Medicare Chief Gail Wilensky.  Wilensky served on the board of ManorCare and made significant sums off the sale.  She's hardly the impartial assessor given her massive remuneration from Carlyle's purchase, gross proceeds of $1.4 million.  However, Wilensky got W.'s White House and Congress to go along with the deal. 

Carlyle monetized ManorCare's physical assets for $6.1 billion in March 2011.    In June of 2011 Carlyle announced it would take ManorCare public  but never executed the deal.  Carlyle owned ManorCare for most of the period in question.  The government's press release stated:

The government’s complaint alleges that ManorCare, which is owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients.  ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments.  ManorCare also allegedly increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged.
Note that healthcare quality will not be "improved" by PPACA's multiple moneychases.  Expect more cheating and fraud to optimize reimbursement, just as ManorCare continued under Carlyle Group ownership.  It's the sorry state of abysmal management and insider politics in our PEU world, where cheating equals opportunity.