When a medical services provider agrees to work with patients receiving Medicare or Medicaid, it must abide by certain guidelines and rules with regard to the services offered to that patient. Of course, medical services must meet industry standards and be performed by a licensed physician. In addition, Medicare or Medicaid will deny any claim with a “taint” of a kickback, and any medical services entity found to be engaging in a kickback scheme to garner patients could face significant penalties, treble damages, and possible criminal sanctions.
In recent years, the Department of Justice has worked fervently to combat the growing problem of kickback schemes within the nursing home and long-term care industry. The American population is aging at an unprecedented rate, requiring states and the federal government to fund an ever-growing number of clientele in need of elder care services. With this growth comes the increased opportunity for fraud, which is precisely the issue presented in a recent whistleblower lawsuit between RehabCare Group, Inc. and a qui tam plaintiff, who is set to receive a reward of $700,000 for coming forward with allegations of fraud.
Details of U.S. ex rel. Health Dimensions Rehabilitation Inc. v. RehabCare Group Inc., et. al.
The case against RehabCare Group, Inc. involves a complex network of medical service providers centered in the Missouri area. Specifically, allegations detail a scheme whereby RehabCare paid another provider, Rehab Systems of Missouri, significant upfront fees ranging from $400,000 to $600,000 in exchange for the latter’s agreement to provide a steady stream of rehabilitation and therapy patients to RehabCare’s nursing facilities. From there, the agreement allowed Rehab Systems to receive a percentage of all revenue received by RehabCare as a result of those patient referrals. RehabCare has not admitted any wrongdoing in the matter, but has agreed to pay $30 million to the federal government to resolve the claims.
Government’s Steadfast Dedication to Eliminating Healthcare Fraud
When nursing and rehabilitaton patients are referred to a certain center for care, they have a right to believe that center is the best option for them in light of their medical situation and type of care offered. When entities agree to offer kickbacks to one another in exchange for patient referrals, the patients lose their ability to freely choose the facility they prefer, as well as the trust in their referring physician to choose a facility based on its reputation and merits alone. For these reasons, the government has worked steadfastly to eliminate these types of arrangements and stands firm in its dedication to encouraging whistleblowers to come forward with information of similar schemes.
In a statement the Department of Justice wrote:
“The Anti-Kickback Statute is intended to protect patients and federal health care programs from fraud and abuse [and] [w]e will remain vigilant in pursuing entities that improperly further their financial interest at the expense of the Medicare Trust Fund.”
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