- Kindred Healthcare has set aside $95 million in a contingency reserve, to be used in a possible settlement involving its recently-acquired RehabCare, the company revealed in an earnings call.
- RehabCare, purchased by Kindred in 2011, has been under investigation by the Department of Justice for claims that it improperly billed Medicare and violated anti-kickback statute through an improper relationship with a vendor.
- The $95 million figure, arrived at after talks with federal investigators, appeared up as a one-off charge in Kindred's Q1 earning report. CEO Benjamin Breier said in the earnings call that the final amount could be as high as $125 million.
"The discussions [with the Department of Justice] are ongoing and until concluded, there could be no certainty about the timing or likelihood of a definitive resolution or the scope of any potential restrictions that may be agreed upon in connection with a settlement or the cost of a final settlement," Breier said.
Aside from the RehabCare: Kindred has been shifting its business model towards rehab and home healthcare and this quarter completed its acquisitions of Gentiva and Centerre. The company reported revenues of $1.7 billion, a 32% jump from Q1 of last year that was a result of the two purchases. It recorded net losses of $146.8 million, compared to $8 million in net income in Q1 of last year.