Dive Brief:
- Kindred Healthcare has agreed to pay $125 million to settle allegations it provided unneeded therapy services to nursing home patients in a scheme to overbill Medicare. Although Kindred agreed to the settlement to avoid litigation, it denied any wrongdoing, Modern Healthcare reported.
- Nursing homes that hired the company's therapy division, RehabCare, to provide those services separately agreed to pay $8 million to the federal government for their participation in the alleged scheme.
- According to a previous Wall Street Journal article, Kindred and participating nursing home contractors increased the number of days they billed for the highest level of therapy Medicare will cover. Medicare was billed for ultrahigh therapy 58% of the time in 2013 compared with 7.6% of the time in 2002.
Dive Insight:
The settled suit alleged Kindred overbilled Medicare between Jan. 1, 2009, and Sept. 30, 2013, and was focused on services provided under contract to nursing homes by RehabCare, which Kindred acquired in 2011.
The Justice Department alleged the company presumptively put patients in the ultrahigh category that required 12 hours of therapy a week. In addition, the DOJ said Kindred had reported they provided therapy minutes when patients were sleeping or unable to benefit from the treatment.
According to Modern Healthcare, the DOJ also announced settlements with four skilled-nursing facilities for participating in submitting false claims to Medicare based on therapy provided by RehabCare, including:
- Wingate Healthcare and 16 of its facilities in Massachusetts and New York for $3.9 million;
- THI of Pennsylvania at Broomall and THI of Texas at Fort Worth for $2.2 million;
- Essex Group Management and two of its Massachusetts facilities for $1.37 million; and
- Frederick County, Maryland, which formerly operated Citizens Care skilled-nursing facility, for $750,000.
Two former RehabCare employees filed the original lawsuit against RehabCare - a physical therapist and an occupational therapist. They will be entitled, as whistleblowers, to receive nearly $24 million, Modern Healthcare reported.