Nursing Home Giant to Pay $125 Million in Whistleblower Settlement

January 13, 2016

Nursing home therapy giant RehabCare has agreed to pay the government $125 million to settle a whistleblower lawsuit alleging it knowingly caused facilities it contracted with to inappropriately bill Medicare for services.  Money from the settlement will be returned to the taxpayers, under the False Claims Act.  The FCA makes it possible for private citizens to file suit on the government’s behalf, if they learn of fraud against the government.  The whistleblower ultimately gets a percentage of the money recovered.

In the lawsuit, the whistleblowers and government alleged that RehabCare, whose parent company is Kentucky-based Kindred Healthcare, set unrealistic financial goals and scheduled therapy to get maximum reimbursements regardless of patients’ actual needs, according to an article in Business Insurance, a sister publication of Modern Healthcare.

Among other things, RehabCare allegedly scheduled and reported therapy after the patients’ treating therapists had recommended they be discharged from therapy. It also allegedly reported that skilled therapy had been provided to patients who were sleeping at the time or otherwise unable to undergo or benefit from therapy.

The provider also allegedly placed patients in the highest therapy reimbursement levels rather than determining their levels of care based on individualized evaluations.

Two former RehabCare employees filed the original whistleblower lawsuit; one was a physical therapist and manager, and the other was an occupational therapist.

Click here to read more in Business Insurance.