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Massachusetts nursing home operator RegalCare Management Group and two executives agreed to pay $1 million to resolve allegations about claims for rehabilitation therapy submitted to Medicare and Medicaid from 2018 through 2023. The settlement includes $165,000 for the whistleblower whose federal lawsuit brought the allegations; the announcement does not describe a finding of liability beyond facts the parties admitted.
RegalCare Management Group, its owner Eliyahu Mirlis and executive Hector Caraballo agreed to pay $1 million to resolve allegations that the Massachusetts nursing home operator submitted unsupported claims to Medicare and Medicaid for rehabilitation therapy, federal prosecutors said Wednesday. The agreement concerns claims submitted from 2018 through 2023 and follows a whistleblower lawsuit under the False Claims Act.
According to the settlement announcement from the U.S. Attorney’s Office for Massachusetts, RegalCare, Mirlis and Caraballo admitted that the company submitted claims for skilled nursing rehabilitation services that were not supported by individual patients’ medical needs. The allegations involved services billed to Medicare and Medicaid, the public health programs that pay for eligible care.
Federal prosecutors said Caraballo modified skilled nursing facility records at various times to support submissions for Ultra High Resource Utilization Group (RUG) claims to Medicare. The office’s release said those changes were made without assessing or speaking with the patients and without consulting clinicians. Prosecutors also said Mirlis directed RegalCare’s billing company to submit claims before patients’ assessment forms had been finalized in the billing system.
The parties agreed to pay $1 million, and the whistleblower identified in court records as McCormick is due to receive $165,000 from the settlement. The announcement says the agreement resolves the allegations and describes facts the parties admitted; it does not characterize the settlement as a finding of liability beyond those admitted facts.
Oversight of Therapy Billing
The case concerns how nursing facilities document patients’ needs before billing public programs for rehabilitation. The allegations focused on whether claims reflected individual medical needs and whether required assessments were complete when billing occurred. Those details matter because patient assessments and clinical records are used to support services billed to Medicare and Medicaid.
The settlement also shows how the False Claims Act can bring allegations to the government through private lawsuits. Under the law, whistleblowers may sue on the government’s behalf and receive part of a recovery. McCormick’s $165,000 share connects the case’s financial resolution to that enforcement process; it does not, by itself, establish the underlying allegations as a court finding.
For residents and families, the allegations raise questions about the documentation and oversight behind billed rehabilitation services. The settlement announcement does not state that any particular resident was harmed, identify specific patients, or report that services were not provided. It describes claims that prosecutors said lacked support in patients’ needs and records.
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A Whistleblower Case and Earlier Settlement
The allegations were first filed in a 2025 federal lawsuit under the False Claims Act. That law allows private individuals to bring cases on behalf of the government over alleged fraud against federal programs. Court records identify the whistleblower as McCormick, who will receive a portion of the settlement under the agreement.
The RegalCare agreement follows a separate settlement announced in March involving Stern Therapy, RegalCare’s therapy provider. That agreement resolved allegations that Stern Therapy conspired with RegalCare to submit false Medicare claims for unnecessary rehabilitation services. The two agreements address related allegations, but they are distinct settlements with different parties.
RegalCare operates skilled nursing facilities in Massachusetts and previously operated facilities in Connecticut, according to the report. The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and Massachusetts authorities.
““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
What the Settlement Leaves Open
The settlement announcement does not provide a detailed breakdown of how the $1 million payment will be allocated beyond McCormick’s share, or specify the number of claims, patients, or facilities involved. It also does not say whether additional enforcement action is planned or provide further detail about the billing company’s role.
The allegations concerned claims prosecutors said were unsupported by patients’ needs or submitted before assessments were finalized. The announcement does not report a court ruling after trial, describe a finding of liability beyond the facts admitted by the parties, or state that specific patients received unnecessary treatment. Those distinctions limit what can be concluded from the settlement alone.
Payment and Case Resolution
RegalCare, Mirlis and Caraballo have agreed to make the $1 million payment, and McCormick is set to receive $165,000. The U.S. Attorney’s Office announcement presents the agreement as resolving the allegations in the federal case. It does not give a payment deadline or outline additional steps in the case, so those details remain unreported.
Any further developments would depend on information released by the parties, prosecutors or the court. The separate Stern Therapy settlement was announced in March, but the current announcement does not say that the two agreements form part of a single proceeding or describe additional action against other parties.
Key Questions
Who agreed to pay the settlement?
RegalCare Management Group, owner Eliyahu Mirlis and executive Hector Caraballo agreed to pay $1 million.
What did prosecutors allege?
Prosecutors alleged that RegalCare submitted Medicare and Medicaid claims for rehabilitation services that were not supported by individual patients’ medical needs. They also described record changes and claims submitted before assessments were finalized.
Did a court find the defendants liable?
The announcement describes a settlement resolving allegations and says the parties admitted certain facts. It does not describe a finding of liability beyond those admitted facts or report a trial verdict.
How much will the whistleblower receive?
McCormick, identified as the whistleblower in court records, is set to receive $165,000 from the settlement.
Is this related to the Stern Therapy settlement?
It follows a separate agreement announced in March that resolved allegations involving Stern Therapy, RegalCare’s therapy provider. The two are separate settlements, though the allegations concerned related billing conduct.
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