Rehab Therapy Provider Pays $125 Million in False Claims Settlement The largest rehabilitation therapy provider in the nation has agreed to pay $125 million to resolve allegations that it submitted false claims to Medicare for rehabilitation services through the skilled nursing facilities (SNFs) where it provided services. Four SNFs that contracted with the provider will pay an additional $8.225 million. ... News in Brief
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News in Brief  |   April 01, 2016
Rehab Therapy Provider Pays $125 Million in False Claims Settlement
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Special Populations / Older Adults & Aging / Healthcare Settings / Practice Management / Professional Issues & Training / Regulatory, Legislative & Advocacy / News in Brief
News in Brief   |   April 01, 2016
Rehab Therapy Provider Pays $125 Million in False Claims Settlement
The ASHA Leader, April 2016, Vol. 21, 14. doi:10.1044/leader.NIB5.21042016.14
The ASHA Leader, April 2016, Vol. 21, 14. doi:10.1044/leader.NIB5.21042016.14
The largest rehabilitation therapy provider in the nation has agreed to pay $125 million to resolve allegations that it submitted false claims to Medicare for rehabilitation services through the skilled nursing facilities (SNFs) where it provided services.
Four SNFs that contracted with the provider will pay an additional $8.225 million.
The government lawsuit alleges that RehabCare violated the False Claims Act by knowingly causing the SNFs to file for Medicare reimbursement for services that were never provided or that were not reasonable, necessary and skilled.
RehabCare, a division of the Louisville, Kentucky-based Kindred Healthcare Inc., contracts with more than 1,000 SNFs in 44 states to provide services.
The government’s complaint alleged that RehabCare set unrealistic financial goals and scheduled therapy to achieve the highest reimbursement level, regardless of the clinical needs of its patients. As a result, the lawsuit claims, RehabCare provided unreasonable and unnecessary services to Medicare patients, and its contracting SNFs submitted artificially and improperly inflated bills to Medicare.
Specifically, the complaint alleged that RehabCare:
  • Presumptively placed patients in the highest therapy reimbursement level, rather than individually evaluating each patient to determine the appropriate level of care.

  • Boosted the amount of reported therapy during “assessment reference periods,” while providing substantially less therapy to those same patients outside the reference periods (a practice known as “ramping”).

  • Scheduled and reported therapy for patients despite treating therapists’ discharge recommendations.

  • Arbitrarily shifted therapy minutes among different disciplines (physical, occupational and speech) to ensure targeted therapy reimbursement levels were achieved, regardless of the clinical need for the therapy.

  • Provided significantly higher amounts of therapy at the end of a therapy measurement period to reach the minimum threshold for the highest therapy reimbursement level—not because of medical necessity—even though patients received less therapy on preceding days.

  • Inflated initial reimbursement levels by misreporting evaluation time as therapy time.

  • Reported provision of skilled therapy to patients who were asleep or otherwise unable to undergo benefit (for example, when a patient had been transitioned to palliative end-of-life care).

  • Reported estimated or rounded minutes—rather than actual minutes—of therapy provided.

“This False Claims Act settlement addresses allegations that RehabCare and its nursing facility customers engaged in a systematic and broad-ranging scheme to increase profits by delivering, or purporting to deliver, therapy in a manner that was focused on increasing Medicare reimbursement rather than on the clinical needs of patients,” says Carmen M. Ortiz, U.S. attorney for the District of Massachusetts.
The settlement resolves allegations brought in a whistleblower lawsuit filed under the False Claims Act by a physical therapist and former rehabilitation manager for RehabCare and an occupational therapist who worked for RehabCare. Under the act, private parties can sue on behalf of the government for false claims for government funds and receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The whistleblowers will receive nearly $24 million in this case.
The claims settled are allegations only, with no determination of liability.
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April 2016
Volume 21, Issue 4