The suit alleges that RehabCare began making payments in 2006 to Missouri nursing home chain Health Systems in exchange for a contract to provide therapy services.
Federal investigators say the arrangement between RehabCare and Health Systems, which is also named as a defendant in the suit, defrauded the government of millions of dollars. Rehab Systems of Missouri, the organization that previously provided therapy services to Health Systems nursing homes, is also named in the suit as a defendant.
Specifically, the suit claims that RehabCare charged Health Systems only 70 percent of the Medicaid reimbursement amount, while Health Systems billed the government for 100 percent reimbursement. The two organizations then split that 30 percent difference. The suit also alleges that in 2006, RehabCare made a one-time payment of roughly $600,000 to Rehab Systems, allegedly funneled to a Rehab Systems manager who had a financial stake in the company.
RehabCare was purchased by Louisville-based Kindred Healthcare last year. A Kindred spokesperson said the system denies and intends to vigorously defend the allegations, according to the report. A spokesperson for Health Systems declined comment, according to the report.
The case began in 2007 as a whistleblower suit, filed under seal by RehabCare competitor, Cambridge, Minn.-based Health Dimensions Rehabilitation.
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