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DOJ Catch Of The Week -- Kindred Healthcare

Posted  January 15, 2016

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to Kentucky-based healthcare provider Kindred Healthcare, Inc.  On Tuesday, the company and its two RehabCare Group subsidiaries agreed to pay $125 million to resolve allegations of violating the False Claims Act by knowingly causing skilled nursing facilities to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, or that never occurred at all.  RehabCare is the largest provider of rehabilitation therapy in the nation, contracting with more than 1,000 skilled nursing facilities in 44 states to provide rehabilitation therapy to their patients.  See DOJ Press Release.

According to the government, RehabCare’s policy has been to achieve the highest Medicare reimbursement level regardless of the clinical needs of its patients.  This has resulted in Rehabcare providing unreasonable and unnecessary services to Medicare patients, and its skilled nursing facility customers submitting inflated bills to Medicare covering those services.  Specifically, the government charged RehabCare with:

  • Placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs.
  • Boosting (or “ramping”) reported therapy during “assessment reference periods” while providing materially less therapy to the same patients outside the assessment reference periods when skilled nursing facilities were not required to report to Medicare.
  • Reporting the provision of therapy to patients even after the treating therapists recommended the patients be discharged from therapy.
  • Arbitrarily shifting the minutes of planned therapy among different therapy disciplines to regardless of clinical need.
  • Providing significantly higher amounts of therapy at the very end of a therapy measurement period to reach the minimum time threshold for the highest therapy reimbursement level.
  • Inflating initial reimbursement levels by reporting time spent on initial evaluations as therapy time rather than evaluation time.
  • Reporting skilled therapy services for patients who were asleep or otherwise unable to undergo or benefit from it.

In announcing the settlement, Department of Justice Civil Division Chief Benjamin C. Mizer stressed the importance of providing healthcare services based on patient needs not company profits: “Medicare beneficiaries are entitled to receive care that is dictated by their clinical needs rather than the fiscal interests of healthcare providers.”  And HHS Inspector General Daniel R. Levinson made it clear that healthcare providers that place profits first will be prosecuted: “Health providers seeking to increase Medicare profits, rather than providing suitable, high-quality care, will be investigated and prosecuted.”

In addition to RehabCare, the government also settled with the following skilled nursing facilities for their role in submitting false claims to Medicare based on therapy services RehabCare provided:  Wingate Healthcare Inc. and 16 of its facilities in Massachusetts and New York ($3.9 million); THI of Pennsylvania at Broomall LLC and THI of Texas at Fort Worth LLC ($2.2 million); Essex Group Management and two of its Massachusetts facilities, Brandon Woods of Dartmouth and Blaire House of Milford ($1.375 million); Frederick County, Maryland, which formerly operated the Citizens Care skilled nursing facility ($750,000).  This is in addition to a number of previous settlements with other skilled nursing facilities for similar conduct.  Click here, here, here and here.

The settlement with RehabCare originated in a whistleblower lawsuit filed by Janet Halpin, a RehabCare physical therapist and former rehabilitation manager, and Shawn Fahey, a RehabCare occupational therapist, under the qui tam provisions of the False Claims Act.  They will receive a whistleblower award of nearly $24 million from the government proceeds of the settlement.

Tagged in: Catch of the Week, FCA Federal, Lack of Medical Necessity, Medical Billing Fraud, SNF, Whistleblower Case, Whistleblower Rewards,