A Nursing Home Operator Just Paid $1 Million to Settle Claims It Billed Medicare for Therapy Patients Didn’t Need

Boston, Massachusetts — A Massachusetts nursing home operator and two of its executives have agreed to pay $1 million to settle allegations that they billed Medicare and Medicaid for rehabilitation therapy patients didn’t need, federal prosecutors announced Wednesday.

RegalCare Management Group, owner Eliyahu Mirlis and executive Hector Caraballo admitted that, between 2018 and 2023, the company submitted claims for skilled nursing rehab services that weren’t supported by patients’ actual medical needs, according to the U.S. Attorney’s Office for the District of Massachusetts.

Records changed without a single patient visit

The details are what industry watchers will notice. Prosecutors said Caraballo modified facility records to justify “Ultra High” rehabilitation claims to Medicare — without assessing patients, speaking to them, or even consulting the clinicians caring for them. Mirlis, meanwhile, directed the company’s billing contractor to submit claims before patients’ assessment forms had even been finalized in the billing system.

The paperwork said one thing. The patients’ charts said another.

The case began as a whistleblower lawsuit filed in 2025 under the False Claims Act, which lets private parties sue on the government’s behalf. The whistleblower, identified in court records as McCormick, will collect $165,000 of the settlement.

Not the operator’s first settlement

It isn’t RegalCare’s first brush with the Justice Department, either. In March, Stern Therapy — the company that supplied rehab services at RegalCare facilities — resolved separate allegations that it conspired with the operator to bill Medicare for therapy that wasn’t necessary.

RegalCare currently runs skilled nursing facilities in Massachusetts and previously operated homes in Connecticut. The case was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General along with Massachusetts authorities.

For providers already juggling tight reimbursement and heavy documentation rules, the message is blunt: federal investigators are watching rehab billing closely, and “Ultra High” therapy claims — the top reimbursement tier — remain a favorite target. The case also shows whistleblowers still have plenty of reason to come forward.

RegalCare, Mirlis and Caraballo agreed to the payment, and the announcement didn’t describe any finding of liability beyond the facts they admitted. It adds to a growing string of enforcement actions across long-term care this year, including a $5.3 million settlement with a long-term care pharmacy over Medicare billing earlier this month.