Major Michigan-Based Rehabilitation Company Settles Health Care Fraud Case

Contact: J. Marc Vezina (504) 813-6100 -
Date: April 9, 2020

Vezina Law Group announced today that Encore Rehabilitation Services, LLC (“Encore”), a major rehabilitation and therapy company based in Farmington Hills, Michigan, with locations in hundreds of skilled nursing facilities in twenty-five other States, will pay $4,033,346 dollars payable in installments, with interest, to settle a False Claims Act lawsuit for health care fraud.

Captioned United States ex rel. Reza Saffarian and Audrey Theile. v. Encore Rehabilitation Services, LLC, et al. No. 1:16-cv-605-JTN-ESC (W.D. Mich.), the lawsuit alleged that Encore engaged in health care fraud when it submitted and caused the submission to Medicare Part A of false claims for therapy services to patients at the following facilities: (1) Autumn Woods, for the period of September 1, 2012 to July 31, 2018; (2) Bay Shores, for the period of April 1, 2013 to April 6, 2017; and (3) MediLodge of Yale, for the period of October 1, 2010 to April 6, 2017. The lawsuit alleges that the false claims sought inflated amounts of Medicare reimbursement for (1) the provision of unreasonable, unnecessary, and/or unskilled rehabilitation therapy; and/or (2) the provision of individual therapy while concurrent and/or group therapy was being provided to the same patients. The lawsuit was filed in 2016 by a former Therapy Program Manager and an Occupational Therapist (“Relators”) and was later joined by the United States Department of Justice, on behalf of the Office of Inspector General (“OIG-HHS”) of the Department of Health and Human Services (“HHS”) (collectively, the “United States”). The lawsuit was originally filed under seal pursuant to the qui tam provisions of the federal False Claims Acts (the “Act”), which allows private persons with knowledge of fraud against a government program to file lawsuits on the government’s behalf. If the case is successful, the private persons exposing the fraud, known as “relators,” are entitled to a percentage of the government’s recovery between 15% and 25% if the government intervenes, which occurred in this case. The Act provides for recovery of treble (triple) the single damages incurred by the government as a result of the fraud, as well as civil monetary penalties of between $5,500 and $11,000 or more per false claim submitted, as well as statutory attorney fees. In this case, the Relators will receive a portion of the recovery by the United States to be determined at a later date.

Relators were represented by J. Marc Vezina and Monica P. Navarro at Vezina Law, PLC, a member of the Vezina Law Group with offices in Lake Orion, Michigan, and New Orleans, Louisiana. The United States was represented by Assistant U.S. Attorney Adam B. Townshend of the Western

District of Michigan, as well as by Trial Counsel William E. Olson of the Commercial Litigation Branch of the U.S. Department of Justice. Co-counsel with the Vezina Law Group was Jeffrey Newman of the Newman Law Offices in Boston, Massachusetts.