HealthSouth Corporation, the nation’s largest provider inpatient rehabilitative healthcare services, allegedly paid illegal kickbacks to the Kerlan Jobe Orthopedic Clinic, a sports medicine clinic in Los Angeles. As a result, the Kerlan Jobe Orthopedic Clinic has agreed to pay the United States $3 million to settle these allegations, the United States Department of Justice announced December 1, 2009.

The settlement resolves allegations that HealthSouth paid kickbacks to Kerlan Jobe in the form of stock option grants, donations to the Kerlan Jobe Foundation, loan forgiveness on an equipment lease, and a disproportionately high ownership interest in a jointly owned ambulatory surgery center. In exchange for the illegal kickbacks, Kerlan Jobe allegedly referred patients to HealthSouth facilities. As a condition of continued participation in government healthcare programs, Kerlan Jobe was required to enter into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services to address Kerlan Jobe’s financial relationships with referral recipients.

For the full release, go to: http://www.justice.gov/opa/pr/2009/December/09-civ-1294.html.

For more information about qui tam and health care fraud, contact Nolan and Auerbach, PA.