Skilled-nursing company and executives agree to $1 million therapy overbilling settlement

What happened

The September 23 DOJ announcement describes a $1 million settlement with RegalCare Management Group, RegalCare Management 2.0, owner Eliyahu Mirlis and executive Hector Caraballo. It resolves federal and Massachusetts allegations about medically unreasonable or unnecessary skilled-nursing rehabilitation services. The agreement includes admitted facts concerning Medicare services in 2018–2019 and MassHealth services in 2018–2023. It distinguishes the governments’ wider allegations from those admissions. Some Medicare claims at the former Ultra High RUG level were not supported by individual patient need and should have been billed at a lower level. These are historical payment classifications, not instructions to use that model today.

The primary agreement identifies Caraballo as a Licensed Practical Nurse and vice president of clinical reimbursement. It says MDS assessment changes were permitted regardless of professional licensure when they accurately reflected patient status, with Registered Nurse certification required. Caraballo made changes without visibly assessing or speaking with patients; some occurred without clinician consultation, while others followed consultation and/or record review. An RN signed off at his request. Mirlis also directed some claims to be billed before assessments were finalized. Those distinctions make patient-specific accuracy, certification and billing sequence the control issues. The separate Stern Therapy resolution was announced in March. The September agreement provides for $1 million plus interest and conditional relator payments; neither the announcement nor its October 6 update proves payment was completed.

Why it matters

The admitted facts offer a concrete documentation and medical-necessity control example. A licensed executive’s participation and an RN signoff did not establish that every billed level matched patient need. Keep the earlier Stern Therapy resolution separate.

Case details

agencies

U.S. Attorney Office, District of Massachusetts

entities

RegalCare Management Group LLC, RegalCare Management 2.0, Eliyahu Mirlis, Hector Caraballo

action Type

Settlement

event Date

2026-09-23

alleged Conduct

Alleged medically unreasonable and unnecessary skilled-nursing rehabilitation services; admitted facts include some unsupported higher-level claims, assessment changes with differing levels of clinician consultation, and some claims billed before assessments were finalized.

resolution

RegalCare entities and two executives agreed to pay $1 million plus interest to resolve specified federal and Massachusetts claims. The agreement includes admitted facts and conditions releases on payment; the announcement does not establish completed payment.

Operational lessons

• Claims should reflect individual patient need and finalized clinical documentation.
• Test assessment accuracy, required RN certification and the clinical basis for changes, rather than assuming an executive’s licensure or signoff establishes medical necessity.
• Reconcile the assessment completion, review and claim-submission sequence before billing.

Sources

• Skilled Nursing Company and Executive Agree to Pay $1 Million to Resolve Overbilling AllegationsOfficial · U.S. Attorney Office, District of Massachusetts · 2026-09-23 · Source review 2026-10-11
• United States and Commonwealth of Massachusetts v. RegalCare, settlement agreementOfficial · U.S. Department of Justice, District of Massachusetts · Source review 2026-10-15