Physical Therapy Company to Pay Millions to Resolve False Claims Act Allegations

Posted March 31, 2026

By the Constantine Cannon Whistleblower Team

On March 25, Jerome F. Gorgon Jr., the U.S. Attorney for the Eastern District of Michigan, announced that Team Rehabilitation Services, LLC (“Team Rehab”), a company operating around 140 physical therapy clinics in various states, agreed to pay $4,969,494 to settle allegations it violated the False Claims Act by submitting false claims for payment to federal healthcare programs.[1]

What Was the Alleged Fraud?

This settlement resolves allegations that from 2018 to 2024 Team Rehab violated the False Claims Act by submitting false claims to federal healthcare programs, including Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the U.S. Department of Veterans Affairs, “for time-based CPT codes for one-to-one physical therapy services even though those services occurred in a group setting where the provider did not maintain sufficient direct patient contact throughout the service to appropriately bill for those time-based CPT codes.”[2]

What Are CPT Codes and How Were They Used in the Alleged Scheme?

Healthcare providers use Current Procedural Terminology (“CPT”) codes when billing for services provided to patients. CPT codes are standardized five-digit numerical codes that identify or describe the services or procedures healthcare providers perform on patients.[3] These codes are central to many healthcare False Claims Act cases, as they represent the services or procedures performed to obtain payment from government payors like Medicare or Medicaid. For example, if the actual services performed—or not performed—on patients differ from the services represented by a particular CPT code, that may form the basis of a False Claims Act case if the other elements are satisfied.

Certain CPT codes are time-based, meaning the healthcare provider selects a CPT code and bills using that CPT code based on the amount of time the provider spent providing services to the patient. In addition, certain CPT codes are only applicable when the healthcare provider is providing service on a one-to-one basis, as opposed to in a group.[4]

In this case, the allegations were that Team Rehab submitted claims for payment using time-based CPT codes for one-to-one PT despite the services occurring in a group setting where the provider lacked sufficient direct patient contact to allow for the use of the time-based CPT codes.[5]

Whistleblower-Initiated False Claims Act Case

This case, like so many successful False Claims Act cases, was initiated by a whistleblower (also called a “relator”) under the qui tam (or whistleblower) provisions of the False Claims Act. Those provisions allow private parties to file lawsuits on behalf of the government and to receive up to 30% of the government’s recovery. In this case, the whistleblower who initially filed suit in 2023 will receive nearly $1 million.[6]

Comments on the Lawsuit

U.S. Attorney Gorgon commented: “Improperly billing federal healthcare programs depletes valuable resources and erodes public trust. This case is further proof that this office will continue to aggressively root out fraud, waste, and abuse in our healthcare system.”[7]

Constantine Cannon partner Dan Vitelli stated: “Healthcare fraud in any form wastes taxpayers’ money. Whistleblowers can play an important role in reporting fraud in government healthcare programs, and we encourage them to come forward with any information they might have about a potential case.”

Constantine Cannon Has Extensive Experience Representing Whistleblowers Under the False Claims Act

Our firm has significant experience representing whistleblowers under the False Claims Act and the many other whistleblower rewards programs, with a number of record-breaking successes. Our representations have led to over $1 billion in government and whistleblower recoveries in total.

To learn more about whistleblower rewards programs, what it means to be a whistleblower, or believe you have a case, please contact us and we will connect you with a member of our whistleblower team for a free and confidential consultation.