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September 5, 2014 Healthcare Fraud

New York Nursing Home Ralex Services Settles False Claims Act Allegations

In a joint effort between the U.S. Department of Justice and the New York Attorney General’s Office, New Rochelle-based Ralex Services, Inc., which does business as Glen Island Center for Nursing and Rehabilitation, has agreed to settle claims it improperly and unlawfully inflated claims for reimbursement from the state and federal Medicaid system.

Medicaid fraud has unfortunately plagued the American healthcare system for decades. However, the False Claims Act has proven increasingly successful in redressing this type of fraud. Much like other cases of healthcare fraud, the Glen Island Center is alleged to have gone to great lengths to extract as much taxpayer money as possible from the overwhelmed Medicaid system, using exaggerated claims and other tactics to pilfer funds and increase profits.

Details of the Case Against Glen Island Center

The case against the Glen Island Center is similar to most other healthcare fraud cases arising under the False Claims Act in that suspicious billing procedures eventually prompted a full investigation into the business practices of the nursing home. Specifically, allegations reveal that for a period spanning from April 2002 through October 2006, the nursing home was engaged in the routine practice of submitting false or exaggerated Patient Review Instrument (PRI) data to the New York Medicaid program. These documents, which are designed to document, summarize, and inform the Medicaid agencies as to the degree of care rendered to nursing home patients, were allegedly falsely inflated by the owner of Glen Island, Leah Friedman, and a former administrator, Eufemia Fe Salomon-Flores.

PRI documents are a component used to determine a facility’s reimbursement rate for services rendered to patients receiving Medicaid benefits. During the period, New York Medicaid received close to 62,000 claims from the facility, many of which contained “upcoded” patient services, causing Medicaid to pay out more to Glen Island than it should have received. More specifically, the PRI documents reflected a higher degree of patient care than was actually rendered, including exaggerated diagnoses, falsified medical conditions, and unnecessary treatments.

Details of the scam further revealed that from 2007 and later, the defendants engaged in an elaborate cover-up by adding false entries and forged signatures to medical records belonging to various employees. To make matters worse, the relator claims that the Glen Island staff actually held a two-week “records tampering party” at the company’s corporate offices.

The nursing home lawsuit was filed by a courageous whistleblower who was working at Glen Island as a nurse when she began to notice false signatures and fraudulent data on PRI sheets. After complaining about the issues to her manager, and immediately reporting the information to state officials, the relator was promptly fired by Glen Island. She is set to receive $250,000 from the State of New York’s share in the recovery (which was about half), and will receive an undisclosed portion of the federal recovery.

In addition to the extensive civil liability facing Glen Island and its administration, several nurses have pled guilty to records tampering and larceny in New York criminal court. Former administrator Salomon-Flores has agreed to pay $2.2 million in restitution to the State of New York, as well.

Contact a Reputable Whistleblower Attorney Today

If you are aware of similar fraud against Medicaid or Medicare, please contact a whistleblower lawyer right away. For more information or to set up your consultation, call Berger Montague today.