RehabCare, other skilled nursing facilities pay $133 million

The nation's largest nursing home rehabilitation therapy provider RehabCare, which is now part of Kindred Healthcare of Louisville, Kentucky, has settled with the government for $125 million over allegations they falsely inflated therapy reimbursement claims to Medicare. Four other skilled nursing home rehab facilities also settled in connection with those claims, bringing the total to a little more than $133 million, the U.S. Attorney's Office announced Tuesday.

Along with RehabCare, Wingate Healthcare, Essex Group Management, Fundamental Administrative Services and Frederick County, MD, who previously operated the Citizens Care nursing facility there, also settled for amounts ranging from $750,000 to $3.9 million. Several other facilities had already settled with the government for their roles in the scheme, said the U.S. Attorney's Office.

[Also: Doctor sentenced 9 years in $20 million clinic scandal]

The claims are part of a whistleblower or qui tam lawsuit. According to the government's complaint, which was unsealed when the settlements were finalized, RehabCare's schemes included a number of illegal and unethical practices:

First, the company placed patients in the "highest therapy category", instead of examining the patient's individual evaluations and then basing the placement on their needs. Next, during a period before October 1, 2011, they engaged in a practice called "ramping", whereby the amount of therapy reported was inflated during a period of assessment. According to authorities, this allowed nursing facilities to bill for the care of their Medicare patients at the highest therapy reimbursement level. Furthermore, less therapy was provided to those same patients outside of the assessment period when facilities did not report to Medicare, and care continued to be scheduled and provided to patients even after their providers recommended they be discharged, said the U.S. Attorney's Office. 

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Authorities say other fraudulent practices included reporting time spent on initial evaluations as therapy time (which is prohibited by Medicare) in order to boost initial reimbursement levels, reporting skilled therapy was provided by patients when in fact patients were not able to receive the care for various reasons, and reporting estimated therapy time provided rather than exact numbers.

"Medicare beneficiaries are entitled to receive care that is dictated by their clinical needs rather than the fiscal interests of healthcare providers," said Acting Assistant Attorney General Benjamin C. Mizer for the Justice Department's Civil Division.  "All providers, whether contractors or direct billers of taxpayer-funded federal healthcare programs, must be held accountable when their actions knowingly cause bills for unnecessary services."

Twitter: @BethJSanborn