Kindred Healthcare will pay a $3 million penalty and close several sites after failing to implement corrections to its billing system under a corporate integrity agreement with the federal government. It's the largest such penalty issued to date.
HHS' Office of Inspector General said Tuesday that the massive post-acute care provider failed to correct improper billing practices during the fourth year of its five-year corporate integrity agreement, stemming from a prior $25 million False Claims Act settlement with Gentiva Healthcare. Kindred acquired Gentiva in February 2015 in a $1.8 billion deal.
Kindred's internal auditors had discovered that Kindred and its predecessors didn't implement the policies and procedures required of them to correct Medicare billing issues. Ultimately, that led to significant billing error rates and overpayments while the company was under federal supervision.
"This penalty should send a signal to providers that failure to implement these requirements will have serious consequences," HHS Inspector General Daniel Levinson said in a statement. "We will continue to closely monitor Kindred's compliance with the CIA."
According to OIG, Medicare was charged for hospice care even though patients weren't eligible for those high reimbursement services.
Kindred said on Tuesday it was pleased to reach an agreement with OIG over the issues, which took place before it acquired these facilities.
“Since that acquisition, Kindred has, in collaboration with the OIG, taken significant corrective actions, including upgrading internal audits and investigations and tracking resolutions of identified issues,” said Susan Moss, senior vice president of marketing and communications for Kindred Healthcare.
The current corporate integrity agreement stems from a March 2012 False Claims Act settlement with Gentiva and its subsidiary Odyssey HealthCare, over Medicare billing for some hospice services. The alleged false claims were submitted from 2006 through 2009.
The Louisville, Ky.-based post-acute care provider has also shut down 18 of its allegedly underperforming facilities, OIG said.
Kindred had other False Claims Act troubles this year when, in January, a subsidiary paid a $125 million settlement over allegations that it knowingly caused contracted facilities to inappropriately bill Medicare. RehabCare allegedly set unrealistic financial goals for its contractors and scheduled patient therapy in order to maximize reimbursements, rather than considering what was best for the patient.
