Western Pa. nursing home chain reaches $15.4M settlement for inappropriate therapy

A company that owns more than 50 nursing homes in Pennsylvania will pay more than $15.4 million to the government to settle federal whistleblower claims that it provided medically unnecessary rehabilitation therapy to residents to help meet revenue goals, U.S. Attorney Scott W. Brady said.

The civil settlement, announced by Brady’s office Wednesday, is between the government and Guardian Elder Care Holdings Inc., a company operates nursing homes throughout Pennsylvania, Ohio and West Virginia.

Guardian Elder Care Holdings, based in Brockway, Jefferson County, is owned by Peter Varischetti, who is also an investor in the Pittsburgh Steelers. Varischetti didn’t return messages seeking comment at his business or home.

Guardian’s chief compliance officer Patricia McGillan said in a statement: “Resident care remains our first priority and we are committed to meeting our obligations under this agreement. We are confident that Guardian’s Corporate Compliance Program advocates for our patients, their families and caregivers.”

The settlement resolves a 2015 whistleblower complaint filed in U.S. Eastern District Court, Philadelphia, that brought the allegations to light that violate provisions of the False Claims Act. Two former Guardian employees, Philippa Kraus and Julie White, were the whistleblowers who made the claims and they will share about $2.8 million of the settlement.

About $6.2 million of unnecessary treatment was billed to Medicare and other federal health care programs at 28 facilities operated by Guardian, among them Jefferson Hills Manor in Jefferson Hills, Scottdale Manor Rehab Center in Scottdale, Beaver Elder Care and Rehabilitation Center in Hopewell and Scenery Hill Manor in Indiana, according to the settlement.

“Billing federal health care programs for medically unnecessary rehabilitation services not only depletes these programs’ funds but also exploits our most vulnerable citizens,” Brady said in a statement. “Our office will continue to aggressively pursue providers who take advantage of our seniors by putting financial gain ahead of patient care.”

Guardian Elder Care pressured its therapists to provide services to meet financial targets and maximize revenue without regard to the clinical need for the care, according to a news release.

Guardian submitted claims to Medicare and other federal health care programs for the care and was reimbursed for it.

Some of the patients involved were receiving hospice care before death and didn’t need therapy, but the company is alleged to have pressured therapists to treat them to meet financial goals, according to the release.

Guardian is also entering into a corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General as part of the settlement, according to the release.

Stopping elder fraud is a top priority of the Justice Department, and it’s an especially important issue in Western Pennsylvania, where the population in older, Brady said.

“Most facilities are doing the right thing, they’re putting patient care first,” he said.

His office and other federal officials depend on whistleblowers like Krauss and White to tackle the problems with health care fraud and elder care, which is taken “very seriously,” Brady said.