Feds Accuse New Rochelle Nursing Home Of Defrauding Medicare

NEW ROCHELLE, NY — A Westchester nursing home and convalescence facility is accused of defrauding Medicare, by keeping well patients longer than necessary and ordering unneeded treatments in a new federal lawsuit.

Sutton Park Center for Nursing and Rehabilitation is among eleven facilities in the state named in a federal lawsuit filed by the Manhattan U.S. Attorney. All of the facilities are operated by New York-based Paragon Management.

The complaint is connected to cases from January, 2010 through September, 2019. Prosecutors say the rehab facilities systematically kept patients longer than necessary in order to maximize the amount billed to Medicare for the patients’ stays. During those stays, the facilities involved are said to have systematically put patients on higher levels of rehabilitation therapy than medically necessary in order to bill Medicare at the highest rate.

“The Medicare program is designed to protect both beneficiaries and taxpayers,” U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”) Special Agent in Charge Scott J. Lampert said in a statement announcing the charges. “When medical providers bill for unnecessary or improper services, patient care is put at risk and the financial integrity of our federal health care system is compromised.”

Prosecutors say Paragon’s Coordinator of Rehabilitation Services Tami Whitney carefully tracked the length of stay for each Medicare patient and expected staff at the facilities to justify discharges scheduled to take place before the patient’s stay approached 100 days—the maximum compensable by Medicare. Together with management at the Facilities, Whitney devised strategies for extending patient stays, including giving patients unnecessary tests to gauge their balance proficiency at the point they were ready for discharge to create a pretext for extending their stays. She reported on the success of these “discharge prevention” measures to owner Issac Laufer, noting both areas where these measures succeeded and those where the facilities had to work harder to prolong patient stays—such as for patients who were “younger and smarter” or “high level.”

In some extreme instances, the facilities are accused of intentionally limiting patients’ progress in order to create the appearance of a continued need for billable services. In one case, Whitney reported to Lauffer that the facilities in his organization should not allow patients to go to the bathroom by themselves because they would then “think they are ready to go home.”

“As alleged, Issac Lauffer, Tami Whitney and the skilled nursing facilities Issac Lauffer owns and/or operates prioritized profits above their obligation to focus on their patients’ actual medical needs,” U.S. Attorney for the Southern District of New York Audrey Strauss said. “In clear violation of the governing regulations, the Defendants fraudulently inflated their Medicare reimbursements by unnecessarily prolonging patient stays and billing for therapy that offered little or no clinical benefit.”

The lawsuit seeks damages and civil penalties under the “False Claims Act.”

In total, there were eleven Paragon-owned rehabilitation facilities named in the suit:

• Montclair Care Center
• East Rockaway Center
• Excel at Woodbury for Rehabilitation and Nursing
• Long Island Care Center
• Treetops Rehabilitation and Care Center
• Sutton Park Center for Nursing and Rehabilitation
• Suffolk Restorative Therapy and Nursing
• Oasis Rehabilitation and Nursing
• Forest Manor Care Center
• Surge Rehabilitation and Nursing
• Quantum Rehabilitation and Nursing