Inpatient Rehab Facility Operator Pays $48 Million To Settle Federal Fraud Allegations

The United States’ biggest operator of inpatient rehabilitation facilities (IRFs) agreed to pay $48 million last week to settle allegations by the Federal government that some of the facilities it operated gave false information to Medicare in order to remain listed as an IRF and receive higher reimbursements than they would otherwise have.

Federal investigators say the firm began to misdiagnose patients 8 years ago in order to qualify them for inpatient treatment that they would not ordinarily need. As Medicare and Medicaid use information about diagnoses given to patients in a facility to determine whether that facility is an IRF, such false information led to the Federal government incorrectly classifying several of the company’s facilities as IRFs and paying the claims they submitted accordingly.

In addition to misdiagnosing patients with an eye to collecting Medicare and Medicaid payments they weren’t entitled to, Federal investigators say the company admitted other patients into IRF facilities who were not ordinarily eligible for such treatment due to advanced illness or disability.

The Federal investigation into the company was launched originally by a trio of lawsuits filed under the qui tam provision of the False Claims Act (a/k/a “Lincoln’s Law”), which allows whistleblowers to file suit against a company which the Federal government may subsequently prosecute if investigators find the claims to be of sufficient merit.

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