Home health provider LHC Group said Friday that it will pay $65 million to settle a civil inquiry with the federal government over whether some Medicare-reimbursed patient care was medically necessary.
LHC Group to pay $65 million settlement
In the agreement, LHC Group did not admit wrongdoing and said it still disputes the claims. The company said there were no findings that the company billed or received payments for services not rendered.
The investigation was disclosed in 2010 after questions were raised by the Wall Street Journal concerning several home health providers. The Journal analyzed Medicare data and reported that the providers appeared to boost the number of visits they made to patients to 10 or above — the threshold at which Medicare reimburses providers an additional $2,200.
LHC said it chose to settle to avoid the expense of a drawn-out dispute. The inquiry centered on whether medical records, in some cases, properly documented medical necessity of some patient visits.
The company also said it agreed to a compliance program including regular auditing and monitoring, a training program for its clerical staff on record-keeping requirements, an interal compliance department that will be involved in all company operations and an employee evaluation program linking performance reviews to compliance.
LHC Group said it would take a settlement charge during the third quarter that would reduce after-tax earnings by $41.3 million, or about $2.25 per share. The company said it would pay the settlement with $25 million in cash and the rest through its credit lines.
In morning trading, LHC Group shares were up 19 cents per share at $16.98. The shares have traded in a 52-week range of $15.76 to $31.69.
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