OIG: Kindred Healthcare fined more than $3M for failing to correct improper billing

HHS' Office of Inspector General has fined Louisville, Ky.-based Kindred Healthcare $3,073,961 for violating a corporate integrity agreement with the federal government related to improper billing.

It is the largest penalty for a CIA violation to date, OIG officials said in a statement.

The penalty resulted from Kindred's failure to correct improper billing practices in the fourth year of its five-year agreement with OIG.

OIG negotiates CIAs with Medicare providers who have settled lawsuits related to False Claims Act violations. Under CIA terms, providers agree to implement corrective actions, such as internal billing audits, and the OIG agrees not to seek to bar providers from federal healthcare programs. CIAs typically last five years.

Internal auditors found Kindred executives failed to implement policies and procedures required by the CIA, resulting in poor claims submission practices, significant error rates and federal overpayments, according to the OIG. Specifically, Kindred was billing Medicare for hospice care to patients who were ineligible for hospice services, the OIG said.

Kindred has paid the fine in full. Kindred has closed 18 facilities it characterized as "underperforming" since March 2015.

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