Albuquerque, N.M.-based Horizon/CMS Healthcare Corp. agreed to pay the federal government $5.8 million to settle an investigation into its billing practices.
The probe focused on a retroactive billing program begun after Horizon's February 1994 purchase of Greenery Rehabilitation Group's skilled-nursing facilities in Connecticut, Louisiana, Massachusetts and North Carolina.
The U.S. attorney's office in New Mexico, which investigated the case, said Horizon believed Greenery had failed to bill Medicare Part B and Medicaid for certain medical supplies and then "grossly inflated" the retroactive bills as a result of poor training and inadequate supervision.
Starting in July 1994, Horizon billed Medicare Part B and Medicaid about $3.4 million for supplies and was actually paid $1.1 million by Medicare and $171,000 by state Medicaid agencies, the government said.
After learning of the federal probe in March 1996, Horizon began its own internal investigation and a month later refunded the government $1.2 million, which is included in the settlement amount.
In return, the government said it will not pursue any criminal prosecution of the company and will allow it to continue to participate in the Medicare and Medicaid programs.
Horizon operates 33 rehabilitation hospitals, 58 specialty hospitals, 282 outpatient rehabilitation clinics and more than 200 skilled-nursing facilities across the country.