In January 2016, Kindred Healthcare and its subsidy Rehab Group agreed to pay the federal government $125 million to resolve allegations that they knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, or that never occurred. The relators  received a whistleblower reward of $23,888,000.

The crux of the allegations turned on Medicare’s statutory mandate that no payment may be made for items or services that are not reasonable and necessary for the diagnosis or treatment of illness or injury. Specifically, the government alleged that the defendants set unrealistic financial goals and scheduled therapy to achieve the highest reimbursement level regardless of the clinical needs of the patient.

According to the qui tam complaint, the relator was a licensed physical therapist who was employed as a rehab manager at one of RehabCare Group’s 1,000+ skilled nursing facilities. Her co-relator was employed by RehabCare Group as a licensed occupational therapist at a neighboring SNF. While the scope of their employment might have been limited to two SNFs, their qui tam complaint alleged a “nationwide systematic fraud scheme” that impacted all SNFs, in 44 states. Undoubtedly, because the relators were able to point to alleged corporate policies, they were able to expand the reach of their qui tam lawsuit.

More information for whistleblowers is located at the Nolan Auerbach & White website.