The employee, Beatrix Maitland, alleged in a False Claims Lawsuit in 2007 that Select maintained an internal practice of making clinical decisions on patients' lengths of stays in rehabilitation hospitals based on weekly reports on patients' insurance reimbursements, regardless of medical need. The lawsuit alleged violations of the Anti-Kickback Statute, the Stark Law and other anti-fraud laws.
The Justice Department on Sept. 12 filed a motion in federal court (PDF) saying it had decided to intervene in some of Maitland's claims, but the record that stipulated exactly which claims was kept under seal. The motion also said Beatrix had agreed to drop any remaining claims against the company after the settlement was paid, but did not reveal the settlement amount.
The settlement was not unsealed in court records, and neither the federal government nor the company would provide it.
Select spokesman Edwin Bodensiek said in a emailed statement that the company admitted no wrong-doing as part of the settlement, and that the company has a robust compliance program. The company took steps even before the whistle-blower lawsuit to ensure that medical services are demonstrably necessary and actually furnished.
According to the corporate integrity agreement, which was posted on the OIG website Friday morning, Select is entering into a five-year plan that outlines a host of standard compliance-program obligations, such as establishing a monitoring program that includes a compliance officer and committee; a written code of conduct; annual training and education for Select employees; and board of directors oversight of compliance.
In a quarterly filing with the Securities and Exchange Commission for the period ended June 30, Select said it had received a subpoena from the inspector general's office in July 2009 that sought documents related to Select's financial relationships with certain physicians practicing at its long-term-care hospitals in Columbus, Ohio.
Select said it recorded a pre-tax charge of $7.5 million to establish a settlement reserve that represents the company's “best estimate of a probable settlement.”