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$125 Million Settlement in Alleged False Claims Against Kindred Healthcare


In January 2016, Kindred Healthcare Inc. agreed to pay $125 million to resolve a federal lawsuit. The lawsuit alleged that they violated the False Claims Act by knowingly allowing skilled nursing facilities to submit false claims for rehabilitation therapy services. In such cases, patients are allowed to sue for damages through a nursing home abuse attorney.

False Records and Billing Procedures

Skilled nursing facilities are required by law to keep accurate, detailed patient records. All records documenting physical, occupational and speech therapies and billing for those therapies must be accurate and truthful to prevent insurance and Medicare fraud. Nursing home residents are often victims of falsified records that promote inflated billing for services. When this occurs, a nursing home abuse attorney can protect a patient's legal rights and finances.

In 2015, former employees of Kindred Healthcare Inc., the nation's largest nursing home therapy provider, reported frequent occurrences of falsified documents and patient bills that were submitted to Medicare. After a thorough federal investigation, findings showed that therapy providers owned by Kindred Healthcare, RehabCare Group Inc. and RehabCare Group East Inc., submitted false therapy documents and bills to Medicare. Federal allegations included:

  • Placing patients in therapies with the highest reimbursement levels, rather than evaluating patients for individual therapy needs.
  • Alternating the time needed for therapy between various therapy disciplines to target the highest reimbursement levels, regardless of the clinical need for the therapy.
  • Reporting therapy sessions that did not occur. Some recorded therapy sessions were billed to patients who were bedridden, severely disabled, or in end-of-life care.
  • Scheduling unnecessary therapy treatments. Some therapy sessions were scheduled and reported even after recommendations from treating therapists that patients be discharged from therapy.

The Settlement

The settlement with Kindred Healthcare resolves allegations originally brought in a lawsuit filed under whistle blower provisions of the False Claims Act. This act permits private parties and individuals to sue on behalf of the government for false claims used to collect government funds. Private parties are entitled to receive a share of any recovery. The whistle blowers in this case were awarded nearly $24 million as their share of the recovery. The government also intervened and filed its own complaint and lawsuit against false claims.

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