September 23, 2026
BOSTON – Skilled nursing facilities (SNFs) operated by RegalCare Management Group, LLC and RegalCare Management 2.0 (together RegalCare), along with two RegalCare executives, have agreed to pay $1 million to resolve allegations that RegalCare submitted, and the executives caused to be submitted, claims to Medicare and Massachusetts Medicaid for skilled nursing rehabilitation therapy services that were medically unreasonable and unnecessary.
Regal Care, along with owner Eliyahu Mirlis and executive, Hector Caraballo, have agreed to collectively pay $1 million to resolve allegations made in a February 2025 False Claims Act (FCA) complaint filed in the federal court in the District of Massachusetts.
SNFs are inpatient facilities that provide transitional care to patients following a 72-hour or more hospital stay. Federal healthcare programs, including Medicare and Medicaid, reimburse providers for medically reasonable and necessary services rendered to SNF patients. The FCA prohibits individuals or entities from submitting, or causing the submission of, false claims for payment to, and false statements material to claims for payment from, the respective programs.
RegalCare operates SNFs in Massachusetts and previously in Connecticut. In February 2025, the United States, along with the Commonwealth of Massachusetts, filed a complaint in federal court in the District of Massachusetts against Regalcare, Mirlis, Caraballo, and another, alleging that the defendants inflated the SNFs’ claims to Medicare and Medicaid.
As part of the settlement agreement, RegalCare, Mirlis, and Caraballo admitted to the following facts. At various times between 2018 and 2023, RegalCare submitted claims to Medicare and Massachusetts Medicaid (MassHealth) for skilled nursing rehabilitation therapy services that were medically unreasonable and unnecessary. At the direction of Caraballo and Mirlis, RegalCare submitted claims that were not supported by individual patient need. At various times, Caraballo modified SNF records to support the submission of Ultra High RUG claims to Medicare despite not being authorized to do so at his licensing level, and without assessing or speaking to the patients, or even consulting with clinicians. Mirlis also directed RegalCare’s billing company to submit claims for patients before the patients’ assessment forms were even finalized in the billing system.
In March 2026, the United States announced a settlement with RegalCare’s therapy provider, Stern Therapy. The settlement resolved allegations raised in the government’s complaint that Stern Therapy conspired with RegalCare to cause the submission of false claims to Medicare for unnecessary skilled nursing rehabilitation therapy services.
The claims against RegalCare, Mirlis, and Caraballo were originally brought under the whistleblower or qui tam provision of the FCA. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. The relator will receive $165,000 from the proceeds of the settlement. The lawsuit is captioned United States and Commonwealth of Massachusetts ex rel. McCormick v. RegalCare Management 2.0, LLC, et al., No. 20-cv-11805-IT (D. Mass.).
United States Attorney Leah B. Foley; Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General; and Massachusetts Attorney General Andrea Joy Campbell made the announcement today. This case is being handled by Assistant U.S. Attorneys Steven Sharobem and Olivia Benjamin of the U.S. Attorney’s Office’s Affirmative Civil Enforcement Unit.
Read Skilled Nursing Company and Executive Agree to Pay $1 Million to Resolve Overbilling Allegations.