Nursing Home’s $125M Settlement in Therapy False Claims Act

 The largest national nursing home therapy provider and its subsidiaries have agreed to pay $125 million to settle claims that it provided unreasonable and unnecessary services to patients in order to receive increased Medicare reimbursements, thus violating the False Claims Act. Kentucky-based RehabCare Group Inc. and its parent company, Kindred Healthcare Inc., were accused of various schemes to defraud Medicare of millions that would have otherwise not been paid.

The Department of Justice reported that Kindred’s RehabCare facilities had a “policy” of setting unattainable financial goals and thus regularly scheduled therapy sessions to reach the highest reimbursement level Medicare would allow, regardless of the individual needs of its patients.

One of the primary allegations brought against Kindred and RehabCare facilities involves a term that has been coined in the healthcare fraud industry as “ramping.” This practice entails reporting huge increases in billable therapy times during Medicare-required “assessment reference periods” – sessions that would otherwise not be provided to patients outside of those periods, when therapy minutes were not required to be reported. This created the illusion that these skilled nursing facilities (SNFs) were entitled to the highest reimbursement level that Medicare could offer without actually having to provide the services for which they were being compensated. This fraudulent practice is common; so much so, in fact, that it has been reported by the Medicare Payment Advisory Commission that for the past 14 years, SNFs have received reimbursements that have been at least 10% higher than the actual cost of care in those facilities.

Furthermore, Kindred is accused of having knowingly incited skilled nursing facilities with whom they were contracted to submitting false claims of various types. Many of the services reported in the submitted claims were later proven to be not provided whatsoever. Frequently, these SNFs would report that skilled therapy had been provided when patients were in fact asleep, otherwise incapacitated, or in some cases had already been transported to palliative end-of-life care. Because these facilities are under direct contract with Medicare, their billable therapies are watched very closely by the federal government. In order to avoid detection, RehabCare would regularly instruct employees of the facilities to falsify patient records in attempt to conceal their fraudulent activities.

The case was initially filed under the whistleblower provisions of the False Claims Act by Janet Halpin and Shawn Fahey, both previous employees of RehabCare. Together, they were compensated $23.9 million for coming forward with information that allowed for the recovery of millions of taxpayer dollars.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network partners with whistleblowers worldwide to expose nationwide schemes that violate the False Claims Act. Utilizing the qui tam provisions of the False Claims Act, we aid whistleblowers in exposing those who knowingly commit healthcare fraud for personal gain.

If you have meaningful information regarding nursing home fraud that you believe is in violation of the False Claims Act, Whistleblower Justice Network can help. Working alongside world-class legal counsel, we will ensure you are protected to the fullest extent of the law and that you receive credit for the information you bring to the U.S. government. Partnering with whistleblowers is all we do. Visit us at, or call us at 844-WJN-4ALL.