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HealthSouth faces subpoenas for seven more hospitals


By Beth Kutscher
Posted: April 25, 2014 - 7:15 pm ET
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HHS' Office of the Inspector General has broadened its investigation of HealthSouth Corp., which operates rehabilitation hospitals.

The U.S. Department of Justice launched an investigation into the Birmingham, Ala.-based company last year, when it subpoenaed four facilities. After market close Friday, HealthSouth disclosed that it received subpoenas that cover an additional seven hospitals.

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The new subpoenas cover the period from January 2008 to December 2013, and are “substantially similar” in subject matter to last year's subpoenas, HealthSouth said in a regulatory filing.

The company is not yet required to turn over patient files, but it said it expects that request will be made.

The government is investigating whether HealthSouth submitted fraudulent Medicaid and Medicare claims, and has requested documents related to the company's marketing functions, pre-admissions screenings, post-admission physician evaluations, patient plans of care and other practices.

In addition, regulators are seeking to determine whether HealthSouth complied with the 60% rule, which requires at least 60% of patients to have at least one of the specified conditions that allow a facility to qualify for higher inpatient rehabilitation-reimbursement rates, rather than lower acute-care payments.

The OIG placed a greater emphasis on inpatient rehabilitation hospitals in its work plan last year. The focus came after the CMS issued new reimbursement criteria that went into effect in January 2010. HealthSouth said that it has “significant ongoing training and education regarding compliance with these rules and criteria,” and that it is cooperating fully with the investigation.

Follow Beth Kutscher on Twitter: @MHbkutscher


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