On January 12, 2016, contract therapy providers RehabCare Group Inc., RehabCare Group East Inc. and their parent, Kindred Healthcare Inc., agreed to pay $125 million to resolve a government lawsuit alleging that they violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, or that never occurred.
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:
(1) 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;
(2) 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”);
(3) Scheduling
and reporting the provision of therapy to patients even after the patients’
treating therapists had recommended that they be discharged from therapy;
(4) 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;
(5) 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;
(6) Inflating initial reimbursement levels by reporting time spent on initial evaluations as therapy time rather than evaluation time;
(7) 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
(8) Reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided.
The settlement with RehabCare resolves allegations originally brought in a lawsuit filed under the qui tam, or whistleblower,provisions of the False Claims Act by Janet Halpin, a physical therapist and former rehabilitation manager for RehabCare and Shawn Fahey, an occupational therapist who worked for RehabCare. The act permits private parties to sue on behalf of the government for false claims for government funds and to 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 as their share of the recovery from RehabCare.
RehabCare Group Inc. and RehabCare Group East Inc. were purchased by the Louisville, Kentucky-based Kindred Healthcare Inc. in 2011. They now operate under the name RehabCare as a division of Kindred. RehabCare is the largest provider of therapy in the nation, contracting with more than 1,000 SNFs in 44 states to provide rehabilitation therapy to their patients.
Attorney's Commentary: A large entity such as RehabCare can afford to pay this settlement. Smaller entities would simply have to close. This is why compliance is critical. Moreover, smaller entities are more likely to be targeted for criminal charges or for being shut down on other grounds. We see large health care providers do the same acts as smaller providers and get treated much better in the civil, administrative and criminal process. This means that smaller providers cannot rely on the defense that simply because large providers engage in conduct that they can. All SNFs and therapy providers can learn from settlements such as this one and make sure their therapists ar following Medicare's strict rules and guidelines.
Posted by Tracy Green, Esq.
Office: 213-233-2260
