In the Courts: Nursing Home Chain, Therapy Providers Settle Kickback Case for $30M

A nursing home management company and two therapy providers have agreed to pay $30 million to settle claims that they engaged in a kickback scheme involving the referral of nursing home business in violation of the False Claims Act, according to a January 17, 2014, news release from the U.S. Department of Justice (DOJ) and a January 22, 2014, article in McKnight’s Long-Term Care News & AssistedLiving.

Until 2006, the majority owner of 60 nursing homes in Missouri also owned a therapy provider that provided therapy services at those nursing homes. In 2006, the majority owner entered into a subcontract agreement with another therapy provider, which was expected to increase Medicare and Medicaid billings. The new therapy provider also paid the former therapy provider $400,000 to $600,000 upfront and continued to pay it a percentage of the revenue from...