Stern Therapy Consultants Agrees to Pay $315,000 to Settle Allegations of Causing False Claims to Medicare

BOSTON - Stern Therapy Consultants (Stern), a New York long-term care therapy provider, has agreed to pay $315,000 to resolve allegations that, between Jan. 1, 2017 and Sept. 30, 2019, it conspired with RegalCare Management Group, LLC, RegalCare Management 2.0 (together RegalCare), RegalCare's owner Eliyahu Mirlis and RegalCare executive Hector Caraballo, to cause the submission of false claims to Medicare for unnecessary skilled nursing facility therapy services. The settlement resolves allegations against Stern in a False Claims Act complaint the government filed in February 2025 against Stern, RegalCare, Mirlis and Caraballo.

Skilled nursing facilities (SNFs) are inpatient facilities that provide transitional care to patients following a 72-hour or more hospital stay. Federal healthcare programs, including Medicare, reimburse providers for medically reasonable and necessary services rendered to SNF patients. The False Claims Act prohibits individuals or entities from submitting, or causing the submission of, false claims for payment and false statements material to claims for payment from federal healthcare programs.

As detailed in the settlement agreement, Stern admitted that at various times between January 2017 and September 2019, Stern's therapists provided Ultra High Resource Utilization Group (RUG) SNF rehabilitation therapy services-the most comprehensive and highest reimbursing services-to RegalCare's Medicare patients after documenting that patients should stop receiving such services, and after patients informed the therapists that they were physically unable to perform and/or refused to perform the services. Stern further admitted that its Senior Regional Director for the RegalCare facilities, who had no clinical experience and no clinical license, certified that a terminated former Stern employee completed Ultra High RUG therapy services for a RegalCare SNF patient without knowing or confirming whether the services were performed by the terminated former employee to justify billing for reimbursement.

The settlement resolves the government's complaint against Stern. That complaint alleged that Stern caused RegalCare to submit false claims to Medicare for medically unreasonable and unnecessary services to patients of RegalCare's SNFs. The government's case against RegalCare, Mirlis and Caraballo is ongoing.

The claims against Stern were brought under the whistleblower or qui tam provision of the False Claims Act. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. The relator will receive $61,875.00 from the proceeds of the settlement. The lawsuit is captioned United States and Commonwealth of Massachusetts ex rel. McCormick v. RegalCare Management 2.0, LLC, et al., No. 20-cv-11805-IT (D. Mass).

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. This case is being handled by Assistant U.S. Attorneys Steven Sharobem and Olivia Benjamin of the Affirmative Civil Enforcement Unit.