In an agreement finalized on Tuesday, Kindred Healthcare Inc., a nursing home company located in Louisville, Kentucky, has agreed to pay $125 million to settle federal allegations that it gave patients unnecessary treatment in a grand scheme to overbill the federal Medicare program and increase company profits. The allegations include placing patients in the highest therapy level, even when the patients were unresponsive and did not benefit from or require the therapy. Kindred agreed to pay the settlement to quiet the issue, but do not admit to any wrongdoing. Additionally, several nursing homes that hired Kindred’s therapy unit, RehabCare, have agreed to pay $8 million to the federal government for participating in the scheme.
The suit alleged that Kindred overbilled Medicare between January 1, 2009 and September 30, 2013. Nursing home therapists spoke out against the company, stating that Kindred pressured them to place patients in ultrahigh therapy and increase the required number of therapy minutes a week, even when the therapists did not feel it was needed. It was also stated that patients were recorded as receiving therapy minutes at times when they were sleeping or physically unable to respond to the treatment.
According to a therapist’s note included in the suit, the therapist wanted to discharge a patient but was pressured by a RehabCare manager to continue providing treatment for a few extra days because the facility “needed to have the minutes so that they would get a bigger reimbursement”. It is also documented in the suit that an outside auditor determined that one nursing home providing Kindred therapy services was adding minutes to force patients to reach high therapy categories, all without documenting a reason or need for the additional minutes.
Under terms of the settlement, Kindred will now have a corporate integrity agreement with the Federal Department of Health and Human Services’ Office of the Inspector General and be required to hire and outside auditor to perform details reviews of 625 therapy patients’ records each year. Kindred will still be allowed to bill Medicare and receive payment for services provided to patients with documented medical necessity.
The allegations against Kindred Healthcare Inc. are forcing lawmakers to re-evaluate the entire Medicare billing system. It is too easy for companies like Kindred to treat patients based on reimbursement from Medicare rather than clinical need. Medicare has hired contractors to evaluate alternative payment systems with a goal achieving a health care system that spends money responsibly and focuses on helping people become healthier.
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