Kindred Healthcare, Louisville, Ky., said the Kentucky attorney general's office is investigating several cases related to quality-of-care issues at the company's 17 nursing facilities in the state, including the "abuse or neglect of residents and Medicaid billing fraud related to the alleged provision of substandard care." The investigation, disclosed by Kindred in its 10-K filing with the Securities and Exchange Commission, could result in civil and/or criminal charges, as well as the possible exclusion of the company's nursing facilities from the Medicare and Medicaid programs, Kindred said. The company said it believes the allegations are without merit and it intends to defend against them "vigorously." At deadline, officials from Kindred and Kentucky Attorney General Ben Chandler's office could not be reached for comment. Frank Morgan, an analyst with Jefferies & Co., Nashville, said in a research note that while Kindred's recent SEC filing is the first reference to the investigations, they actually date back to September of 2000. While the ongoing investigations "pose risks to the company's operations we would not dismiss lightly, they also do not represent the largest risk," Morgan said, adding that profitability is "unlikely" for Kindred in 2003 if it is unable to divest its Florida operations. Kindred, operates a total of 285 nursing facilities with 37,376 beds and 65 hospitals with 5,385 beds, the filing said. Kindred's predecessor company, Vencor, previously settled fraud charges and emerged from bankruptcy in 2001.-- by Julie Piotrowski
Ky. AG investigates quality of care at Kindred
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