Nursing Home Pays $360,000 Judgment As Restitution To Government

SKOKIE, IL — A Norridge nursing facility and its Skokie-based affiliate agreed to pay $360,000 to settle a pair of whistleblower lawsuits alleging they violated the False Claims Act by providing medically unnecessary services to Medicare beneficiaries.

Norridge Gardens, at 7001 West Cullom Ave., and Rex Therapeutics, of 8140 McCormick Blvd., entered into a consent judgment Friday with the U.S. Attorney's Office in Chicago to pay restitution.

Neither company admits liability, but the agreement resolves civil claims relating to the allegation that the facility spent the eight years defrauding the government.

Part of the money the businesses agreed to pay will go to an occupational therapist who first filed a whistleblower lawsuit against Norridge Gardens and several other facilities under seal in 2014.

Katherine Verhulst alleged that Norridge Gardens conspired with the company where she had worked in order to defraud the government by overcharging Medicare and Medicaid.

The facility would manipulate and inflate therapy and rehab data to trigger higher reimbursement rates from the federal programs, according to her complaint.

While Verhulst was working for a different business, she said she learned that Norridge Gardens administrators Barak Baver and Safet Keljalicis had ordered therapists to bill at inflated rates regardless of medical necessity.

According to the settlement, the government's civil allegations include that Norridge filed claims for therapy where none had been provided, pressured people to meet reimbursement quotas, claimed payment for services with no doctor's order, scheduled therapy for patients whose therapist had recommended they be discharged, billed evaluations as therapy and more.

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Many of the therapists involved in the scheme had been admitted to the country on work visas sponsored by the skilled therapy vendor Quality Therapy & Consultation, or QTC, formerly of Orland Park, Verhulst alleged.

"These Philippines-born therapists feared that QTC, by and through [owner Frances] Parise, would terminate sponsorship of their visas such that they would be returned to the Philippines if they did not comply with orders to inflate diagnoses of patients or if they refused to perform medically unnecessary or unskilled therapy services to maximize minutes billed," according to her second amended complaint.

In 2019, Parise and four nursing homes agreed to pay $9.7 million to resolve the allegations.

The latest settlement does not preclude future criminal charges, and while the allegations it resolves are not criminal, some listed owners of Norridge Gardens are involved in another criminal case.

According to a 2019 filing with the Illinois Department of Healthcare and Family Services, 45 percent of Norridge Gardens was owned by Netzach Investments LLC, a corporate entity controlled by Zvi Feiner, who is facing pending fraud charges for what prosecutors portrayed as a Ponzi scheme.

Feiner's co-defendant in the case — who is scheduled to change his plea of not guilty at a hearing next month — owned another 5 percent as of the report, the most recent available from the state. Barak Baver, the brother of Feiner's co-defendant, owned another 25 percent.

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The allegations in the settlement with Norridge and Rex only relate to conduct between 2008 and 2016.

Last year, Rex Therapeutics received a loan of between $1 million and $2 million from the Paycheck Protection Program created as part of the Coronavirus Aid, Relief, and Economic Security, or CARES, Act, according to data from the U.S. Treasury Department and Small Business Administration.

Norridge Garden is a 292-bed skilled nursing facility that specializes in serving the Polish community, according to its website.

Other locations listed under the same ownership include Champaign Urbana Nursing in Savoy, Gardenview Manor in Danville, Gilman Healthcare Center in Gilman, Pershing Gardens in Stickney, Winfield Woods Healthcare Center in Winfield and Premier HealthCare in New Harmony, Indiana.

The offices of its management company, Premier Healthcare Management, share an address with Rex Therapeutics. It is also managed by Bavar, according to corporate filings with the Illinois Secretary of State's Office.

Representatives of Norridge Gardens and Rex Therapeutics did not respond to a request for comment Monday. Any response received will be added here.

The $360,000 in restitution, to be paid quarterly, is only valid as long as the companies have been honest about their money situation, according to the settlement.

"The Settlement Amount represents the amount the United States is willing to accept in compromise of its civil claims arising from the Covered Conduct due solely to Norridge’s and Rex’s financial condition as reflected in the Financial Disclosures," it said.

If Norridge misses a payment and does not come to an agreement with the government about it, "the remaining unpaid balance of the Settlement Amount shall become immediately due and payable, and interest on the remaining unpaid balance shall thereafter accrue at the rate of 12% per annum, compounded daily from the date of Default, on the remaining unpaid total (principal and interest balance)."

According to the settlement, the U.S. Health and Human Services Department could exclude Norridge from all federal health care programs if it defaults on the settlement.