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Massachusetts nursing home operator RegalCare Management Group and two executives agreed to pay $1 million to resolve federal allegations over rehabilitation claims submitted to Medicare and Medicaid from 2018 through 2023. A whistleblower identified in court records as McCormick will receive $165,000; the settlement follows a separate agreement involving RegalCare’s therapy provider.
The U.S. Attorney’s Office for Massachusetts said RegalCare, Mirlis and Caraballo admitted that the company submitted claims for skilled nursing rehabilitation services that were not supported by individual patients’ needs. The allegations concern billing to Medicare and Medicaid, the federal health programs for older adults and people with low incomes or disabilities.
According to the office’s announcement, Caraballo modified skilled nursing facility records at various times to support claims at the Ultra High Resource Utilization Group (RUG) level. Prosecutors said he did so without assessing or speaking with the patients or consulting clinicians. Mirlis, meanwhile, directed RegalCare’s billing company to submit claims before patients’ assessment forms had been finalized in its billing system.
The allegations were first filed in a 2025 federal False Claims Act lawsuit. Court records identify the whistleblower as McCormick, who will receive $165,000 from the settlement. The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and Massachusetts authorities, according to the federal announcement.
Federal Funds and Nursing Home Billing
The agreement addresses how a nursing home operator documented and billed for skilled rehabilitation services paid for through Medicare and Medicaid. Claims unsupported by individual patients’ needs can raise questions about whether public funds paid for care that was not medically justified and whether billing records accurately reflected assessments.
The case also shows how the False Claims Act can bring alleged billing practices to federal attention through private lawsuits. Under the law, a whistleblower may sue on the government’s behalf and receive a share of a recovery; McCormick’s $165,000 payment is part of this settlement. The agreement itself resolves the allegations and should be read alongside the specific admissions described by prosecutors.
A Separate Therapy Provider Settlement
RegalCare operates skilled nursing facilities in Massachusetts and previously operated facilities in Connecticut, according to the report. The company’s facilities provide nursing care and rehabilitation services, for which providers may submit claims to Medicare or Medicaid when program requirements are met.
The $1 million agreement follows a separate settlement announced in March involving Stern Therapy, RegalCare’s therapy provider. That earlier agreement resolved allegations that Stern Therapy conspired with RegalCare to submit false Medicare claims for unnecessary rehabilitation services. It was a distinct settlement involving the provider; the September agreement concerns RegalCare and its two executives.
The original lawsuit was brought under the federal False Claims Act, which permits private individuals to file claims on the government’s behalf. The U.S. Attorney’s Office announcement describes the conduct admitted by RegalCare, Mirlis and Caraballo and the payment terms, while the source report does not provide further details about the court’s handling of the case.
“At various times, Caraballo modified SNF records to support the submission of Ultra High RUG claims to Medicare, and without assessing or speaking to the patients, or even consulting with clinicians.”
— U.S. Attorney’s Office for Massachusetts
Settlement Scope and Remaining Questions
The source announcement does not say whether RegalCare, Mirlis or Caraballo will face additional operational requirements, monitoring or other penalties under the agreement. It also does not provide a breakdown of the $1 million among the parties or specify how many claims or patients were involved.
The settlement resolves the allegations, but the available account does not characterize it as a broader court finding of liability beyond the facts the parties admitted. Details about the admissions’ full legal scope, and whether the parties have made additional public statements, are not included in the source material.
Payment and Case Resolution
RegalCare, Mirlis and Caraballo have agreed to pay $1 million, and McCormick is set to receive $165,000 from that settlement. The federal announcement does not state a payment deadline or describe further proceedings, so the timing and any remaining court steps are unclear from the available information.
Further details may emerge through court records or statements from the parties and investigators. For now, the announced agreement resolves the federal billing allegations described in the settlement, while the earlier Stern Therapy agreement remains a separate resolution.
Key Questions
What did RegalCare and its executives agree to pay?
RegalCare Management Group, Eliyahu Mirlis and Hector Caraballo agreed to pay $1 million to resolve federal allegations related to rehabilitation billing to Medicare and Medicaid.
What billing conduct did prosecutors describe?
The U.S. Attorney’s Office said Caraballo modified facility records to support Ultra High RUG claims without assessing or speaking with patients or consulting clinicians. It also said Mirlis directed claims to be submitted before patient assessment forms were finalized.
When did the alleged conduct occur?
The settlement concerns claims submitted between 2018 and 2023, according to the federal announcement as reported by Skilled Nursing News.
Who receives money from the settlement?
The whistleblower identified in court records as McCormick will receive $165,000 from the settlement.
Is this the same settlement as the Stern Therapy agreement?
No. Stern Therapy, RegalCare’s therapy provider, reached a separate agreement announced in March over allegations involving unnecessary rehabilitation claims. The $1 million agreement concerns RegalCare and its two executives.
Source: rss
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