Catholic Health to pay $6 million to settle false claims allegations

Posted at 4:26 PM, Oct 27, 2017
and last updated 2017-10-27 23:15:39-04

Catholic Health System has agreed to pay $6 million to settle allegations that its subsidiary submitted false claims to government health care programs over an eight-year period.

According to federal prosecutors, Home & Community Based Care - formerly known as Continuing Care - submitted or caused to be submitted false claims to Medicare for rehabilitation therapy services from January 2007 through December 2014.

The services in question were provided by Catholic Health at short and long-term skilled nursing and health care facilities including Father Baker Manor in Lackawanna, the McAuley Residence in the Town of Tonawanda and St. Francis Williamsville.

The services were administered at levels that were unreasonable, not medically necessary, and not supported by the residents' medical records, prosecutors said.

"A healthcare system that is infected with dishonesty is susceptible to one of the worst afflictions known to mankind - human greed," said Acting U.S. Attorney James Kennedy, Jr. "Today's settlement demonstrates our unwavering commitment to eradicating this cancer from our federal health care programs."

The lawsuit was brought fourth by a whistleblower under the False Claims Act, which allows private citizens to bring lawsuits on behalf of the United Sates and receive part of the proceeds of a settlement.

Catholic Health System admits no wrongdoing or liability as part of the settlement. In response to the allegations, it released a statement, which reads in part:

The government’s case was based on findings of alleged overutilization in a small sample of cases. The government also relied on statistics indicating that rehabilitation services utilization at Catholic Health sub-acute rehabilitation facilities exceeded national averages. Determinations of the medical necessity of therapy services made years after care was provided are highly subjective, and Catholic Health does not agree with the government’s conclusions concerning the medical necessity of rehabilitation services provided at its facilities. 


Catholic Health maintains that therapy was provided pursuant to physician approved and monitored plans of care. Moreover, Catholic Health maintains that while its rehabilitation patients received more intense therapy on average than patients at other facilities, its patients’ stays were significantly shorter than national averages – meaning the more intense level of therapy services resulted in Catholic Health patients returning home faster.


Catholic Health cooperated fully throughout the government’s three year investigation. Litigation of this matter would have gone on for years and consumed substantial internal and external resources. By agreeing to resolve this matter now, Catholic Health will instead direct those resources to continuing to provide patients the highest level of care.