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Rehab services provider settles whistleblower suit over kickbacks

Creating unfair incentives to bring in business in the health industry may be the basis for a claim under the False Claims Act. Improper contracts may come in a variety of forms. Kickback schemes and similar inducements to increase revenues from Medicare or Medicaid reimbursements are often the focus of health care fraud lawsuits. Private individuals may initiate a lawsuit on behalf of the government to expose fraud in government contracts.

Providing Services At Low Cost To Induce Long-Term Contracts

The Department of Justice says that Reliant Rehabilitation Holdings Inc. violated the FCA over the course of roughly four years by providing rehabilitative therapy services in nursing homes at little or no cost to promote its business and induce contracts with the nursing home facilities. The government says that the scheme amounted to providing unlawful kickbacks to obtain patient referrals and secure ongoing contracts with physicians and nursing care facilities.

Overpaying Supervising Doctors To Increase Business

In addition, the DOJ alleges that the rehabilitation company paid physicians above market rates to supervise nurse practitioners who provided therapy. The higher-than-market rate paid to doctors was aimed at increasing visibility and business for the rehabilitation services company. The government says that Reliant submitted claims to Medicare for services performed that were tainted by the unlawful kickback schemes. Such unfair practices tend to focus on profits over the best interests of patients, and taint the overall health care industry, according to the DOJ.

A doctor initiated a whistleblower lawsuit regarding the alleged unlawful practices. The Department of Justice intervened. The case recently settled for $6.1 million. The physician who originated the lawsuit is expected to receive roughly $915,000 for bringing the case forward. Under the FCA, private individuals who file an initial whistleblower lawsuit on behalf of the government are entitled to receive a percentage of any settlement or verdict that results from the case. The settlement does not include an admission of wrongdoing.

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