Therapy Providers Agree to Pay $30 Million to Resolve FCA Allegations

The U.S. Department of Justice announced on January 17, 2014, that RehabCare Group Inc., RehabCare Group East Inc., Rehab Systems of Missouri, and Health Systems Inc. agreed to pay $30 million to settle claims in a whistleblower-initiated lawsuit that the companies violated the False Claims Act (FCA) by engaging in a kickback scheme for nursing home patient referrals.

Allegedly, between 2006 and 2011 RehabCare and Rehab Systems had an agreement whereby RehabCare obtained Rehab System’s’ contracts to provide therapy in 60 nursing homes.  In exchange, RehabCare paid an upfront fee of $400,000 to $600,000 and gave Rehab Systems a percentage of the revenue generated by each referral.

According to U.S. Department of Health and Human Services Office of Inspector General Special Agent in Charge Gerald T. Roy, the settlement  “sends a message to those who seek to improperly take advantage of the Medicare program.”  As a result of the settlement, the whistleblower will receive a $5.7 million award.

The full Department of Justice press release can be found here.


If you have a False Claims Act case, please contact the Rabon Law Firm for a free consultation.



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