Leah B. Foley United States Attorney for the District of Massachusetts | Department of Justice
Stern Therapy Consultants, a provider of long-term care therapy based in New York, has agreed to pay $315,000 to settle allegations that it played a role in the submission of false Medicare claims for unnecessary skilled nursing facility (SNF) therapy services. The settlement covers alleged actions that took place between January 1, 2017, and September 30, 2019.
According to the U.S. Attorney’s Office for the District of Massachusetts, Stern conspired with RegalCare Management Group, LLC; RegalCare Management 2.0; RegalCare’s owner Eliyahu Mirlis; and executive Hector Caraballo. The government filed its complaint against all parties in February 2025 under the False Claims Act.
Skilled nursing facilities provide transitional care for patients after hospital stays of at least three days. Federal programs like Medicare reimburse providers only for services considered medically necessary and reasonable. The False Claims Act makes it illegal to submit or cause the submission of false claims or statements related to payment from federal healthcare programs.
In the settlement agreement, Stern admitted that its therapists provided Ultra High Resource Utilization Group (RUG) SNF rehabilitation therapy—the most comprehensive and highest-paying level—to some RegalCare Medicare patients even after records indicated these patients should have stopped receiving such services. In some cases, patients told therapists they could not perform or refused the services but were still documented as receiving them.
Stern also acknowledged that its Senior Regional Director at RegalCare facilities certified that a former employee completed Ultra High RUG therapy services for a patient without confirming whether those services had actually been performed by the terminated employee.
The government’s case against RegalCare, Mirlis, and Caraballo is ongoing.
The allegations against Stern were brought under the whistleblower provision of the False Claims Act. This law allows private individuals to sue on behalf of the government over fraudulent claims and share in any recovery. In this case, the whistleblower will receive $61,875 from the settlement proceeds.
“United States Attorney Leah B. Foley and Roberto Coviello, Special Agent in Charge of the U.S. Department of Health & Human Services’ Office of the Inspector General made the announcement today.” The case is being managed by Assistant U.S. Attorneys Steven Sharobem and Olivia Benjamin from the Affirmative Civil Enforcement Unit.
