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Contract Therapy Providers Resolve False Claims Act Lawsuit for $30 Million

February 11, 2014 — Health care fraud drives up the cost of federally-funded health care and jeopardizes patient safety. Those who are best situated to discover False Claims Act violations are usually health care insiders. The qui tam provisions in the False Claims Act give conscientious whistleblowers a way to step forward and collaborate with the government to stop illegal kickbacks and other forms of Medicare fraud. Informants who file a whistleblower lawsuit on the government’s behalf may be rewarded with a portion of the proceeds when the government makes a recovery.

Whistleblower to Receive $5.7 Million in Alleged Nursing Home Operation Involving Kickbacks for Patient Referrals

Rehab Systems of Missouri, RehabCare Group Inc., RehabCare Group East Inc. and Health Systems Inc. have settled a whistleblower lawsuit for $30 million. The qui tam suit alleged that the three contract health services businesses and the management company violated the False Claims Act by running a kickback scheme involving the improper referral of nursing home business. The whistleblower’s share of the recovery will be $5.7 million.
According to the U.S. Justice Department, from 2006 to 2011, RehabCare allegedly made a deal with Rehab Systems of Missouri to obtain that company’s contracts for therapy services to patients living in 60 nursing homes controlled by James Lincoln, the majority-owner of Rehab Systems. In return for the steady stream of referrals from Rehab Systems to RehabCare, RehabCare allegedly made an upfront payment to Rehab Systems for between $400,000 and $600,000. In addition, Rehab Systems would keep a share of the revenue created by the referrals.

Insiders Play Central Role in Exposing Kickback Schemes and Other Forms of Health Care Fraud

Inside employees in the health care field frequently are the first to identify False Claims Act violations concerning illegal kickbacks. These brave whistleblowers are entitled to a full understanding of the process before they step forward. With qui tam lawyers in multiple offices across the country, Waters & Kraus protects informants’ rights and advances their interests. Contact us or phone our False Claims Act attorneys at 855.784.0268 to learn more about working together to fight health care fraud.

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