Joshua S. Levy, U.S. Attorney | U.S. Attorney for the District of Massachusetts
The U.S. Attorney’s Office, in collaboration with the Massachusetts Attorney General’s Office, has filed a joint complaint under the federal and Massachusetts False Claims Acts against 19 skilled nursing facilities (SNFs) in Massachusetts and Connecticut. The complaint targets RegalCare Management Group, LLC, RegalCare Management 2.0, their owner Eliyahu Mirlis, executive Hector Caraballo, and therapy consultant Stern Therapy Consultants.
These SNFs provide transitional care to patients post-hospitalization. Federal healthcare programs like Medicare and Medicaid reimburse providers for necessary services rendered to SNF patients. The False Claims Acts prohibit false claims for payment from these government programs.
The complaint alleges that between 2017 and 2023, RegalCare submitted fraudulent claims to Medicare and Medicaid for unnecessary services at their SNFs in Massachusetts and Connecticut. This alleged scheme resulted in millions of dollars in damages to these programs.
RegalCare is accused of billing Medicare for high-level rehabilitation therapy services not needed by patients. Caraballo allegedly altered patient records to support this billing without proper authorization or assessment. Additionally, RegalCare reportedly directed its billing company to bill Medicare before completing necessary clinical documentation.
Stern Therapy Consultants allegedly conspired with RegalCare by scheduling therapists to provide unnecessary services to justify high-level billing. Stern managers reportedly pressured therapists who refused these actions with employment threats.
United States Attorney Leah B. Foley stated: “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.” She emphasized the importance of holding accountable those exploiting federal healthcare programs.
Massachusetts Attorney General Andrea Joy Campbell expressed pride in the partnership with the USAO: “My office will continue to work aggressively to protect our elders and hold companies accountable that seek to harm them or violate our false claim laws.”
Roberto Coviello from the U.S. Department of Health and Human Services highlighted taxpayer expectations: “Taxpayers who fund the Medicare and Medicaid programs expect skilled nursing facilities to bill those programs honestly and accurately.”
The lawsuit was initiated by a whistleblower under qui tam provisions allowing private citizens to sue on behalf of governments. The case is titled United States and Commonwealth of Massachusetts ex rel. McCormick v. RegalCare Management 2.0, LLC, et al.
This matter is being handled by Assistant U.S. Attorneys Steven Sharobem, Andrew Caffrey, Olivia Benjamin, Diane Seol from the Affirmative Civil Enforcement Unit; Assistant Attorney General Scott Grannemann from the Medicaid Fraud Division also contributes.
It should be noted that these are allegations only; no liability determination has been made yet.
