US Attorney – Physical Therapy Company Pays Over $200,000 To Resolve Allegations of Fraudulent Billings – US Legal Announcement Service –
A Glendale physical therapy company that contracts with Southern California Hospitals to operate hospital therapy departments, as well as its owners and operators, have paid the government $233,345 to resolve allegations in a “whistleblower” lawsuit that they caused the submission of false claims to Medicare.

Interstate Rehabilitation LLC, and owner/operators James Pietsch, Sandra Pietsch and Beth Celo, wired the settlement payment to the government two weeks ago. On April 3, United States District Judge Stephen V. Wilson unsealed the whistleblower case. And today the government moved to dismiss the lawsuit.

A lawsuit was filed against Interstate Rehabilitation under the qui tam, or whistleblower, provisions of the False Claims Act in 2002. The complaint alleged that the company improperly billed Medicare for services that were supposed to be provided by licensed physical therapists, when in fact the services were not.

According to the lawsuit, from mid-1998 through the end of 2002, Interstate Rehabilitation violated Medicare rules by using clerical employees and other non-professional staff to provide physical therapy services without the presence of a licensed physical therapist. The services were allegedly provided to patients at skilled nursing facilities at area hospitals, which caused the facilities to submit false claims for payment to Medicare. The affected facilities included California Hospital Medical Center, Community Hospital of Gardena, East Los Angeles Doctors Hospital, Memorial Hospital of Gardena, VitalCare Skilled Nursing Facility, Bay Harbor East Hospital, Bay Harbor West Hospital, Santa Teresita Hospital, Hemet Valley Medical Center, St. Vincent Medical Center, and Doheny Villa Skilled Nursing Facility.

The lawsuit was filed by former Interstate Rehabilitation employees Janine Gostel and Sonia Sarmiento, who will split 16 percent of the settlement.

Interstate Rehabilitation and the other defendants agreed to pay the settlement without admitting any wrongdoing.

This case was investigated by the Office of Inspector General for the Department of Health and Human Services. People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.
CONTACT: Assistant United States Attorney Lisa A. Palombo
(213) 894-4042
Release No. 09-047

Scroll to Top