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RehabCare to pay $125M in fraud settlement

January 12, 2016
by Pamela Tabar, Editor-in-Chief
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The nation’s largest rehabilitation therapy provider, RehabCare, has agreed to pay $125 million to settle fraud charges stemming from a federal investigation alleging false reporting of therapy services and over-billing at multiple nursing home sites.

RehabCare is accused of billing for the highest level of therapy services regardless of the patient’s needs, fudging the number of minutes spent on therapy, continuing therapy services when they were no longer necessary and even reporting “that skilled therapy had been provided to patients when in fact the patients were asleep,” or had been transferred to end-of-life care,  according to the U.S. Department of Justice.  In turn, when the nursing homes submitted their Medicare claims based on the false therapy reporting, they became part of the fraudulent activity as well.

RehabCare has been under scrutiny for years, including other federal fraud investigations from the same period of 2011-2013 and a $30 million settlement in 2014.

The settlement is the latest black eye for parent company Kindred Healthcare, which purchased RehabCare in 2011.

The two whistle-blowers, both former RehabCare employees, will receive a total of $24 million under the federal whistle-blower rewards program.