Kindred Healthcare Inc. and its subsidiary RehabCare Group Inc. have agreed to pay $125 million to settle a whistleblower lawsuit on Medicare therapy claim overbilling. The settlement, announced by the U.S. Department of Justice, ended an investigation into claims brought against the companies by Janet Halpin and Shawn Fahey, former RehabCare therapists, in a 2011 lawsuit. The U.S. attorney’s office in Boston says RehabCare and four nursing facility operators submitted Medicare claims based on therapy services that were “unreasonable, unnecessary … or that never occurred.” The nursing home operators agreed to pay an additional $8 million. The company is now part of Louisville, Kentucky-based Kindred Healthcare. RehabCare has therapists in 46 states, including Florida, according to its website.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department made a statement regarding the settlement. “Medicare beneficiaries are entitled to receive care that is dictated by their clinical needs rather than the fiscal interests of healthcare providers. All providers, whether contractors or direct billers of taxpayer-funded federal healthcare programs, will be held accountable when their actions cause false claims for unnecessary services.”
The government’s complaint alleged that RehabCare’s policies and practices, including setting unrealistic financial goals and scheduling therapy to achieve the highest reimbursement level regardless of the clinical needs of its patients, resulted in Rehabcare providing unreasonable and unnecessary services to Medicare patients and led its SNF customers to submit artificially and improperly inflated bills to Medicare that included those services. Specifically, the government’s complaint alleged that RehabCare’s schemes included the following:
- Presumptively 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;
- During the period prior to Oct. 1, 2011, boosting the amount of reported therapy during “assessment reference periods,” thereby causing and enabling SNFs to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy to those same patients outside the assessment reference periods, when the SNFs were not required to report to Medicare the amount of therapy RehabCare was providing to their patients (a practice known as “ramping”);
- Scheduling and reporting the provision of therapy to patients even after the patients’ treating therapists had recommended that they be discharged from therapy;
- Arbitrarily shifting the number of minutes of planned therapy among different therapy disciplines (i.e., physical, occupational and speech therapy) to ensure targeted therapy reimbursement levels were achieved, regardless of the clinical need for the therapy;
- Especially after Oct. 1, 2011 and continuing through Sept. 30, 2013, providing significantly higher amounts of therapy at the very end of a therapy measurement period not due to medical necessity but rather to reach the minimum time threshold for the highest therapy reimbursement level, to enable SNFs to bill for the care of their Medicare patients accordingly, even though the patients were receiving materially less therapy on preceding days;
- Inflating initial reimbursement levels by reporting time spent on initial evaluations as therapy time rather than evaluation time;
- Reporting that skilled therapy had been provided to patients when in fact the patients were asleep or otherwise unable to undergo or benefit from skilled therapy (e.g., when a patient had been transitioned to palliative end-of-life care); and
- Reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.
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