Stryker Corp., Kalamazoo, Mich., and former subsidiary Physiotherapy Associates have agreed to pay $16.6 million to settle allegations that Physiotherapys clinics submitted false claims for state and federal reimbursement.
The agreement with the U.S. Justice Department resolves allegations that originated in separate whistle-blower lawsuits filed by employees of Physiotherapy, which Stryker sold in May to a Chicago-based private equity firm.
Stryker acknowledged in a June news release and filing with the Securities and Exchange Commission that the company would retain responsibility for certain cash damages in connection with the investigation involving Physiotherapys billing and coding practices. A Stryker spokeswoman said the company has a policy of not commenting on litigation.
Physiotherapy, under the terms of the settlement, will enter a corporate integrity agreement with HHS inspector generals office. The companys general counsel, Rick Binstein, said the problems were limited to technical billing errors and insufficient documentation in a handful out of about 450 clinics. There was no finding of fraud or a systemic problem, Binstein said. -- by Gregg Blesch
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