RehabCare to Settle False Medicare Claims for $30M; Whistleblower to Get $700K

RehabCare Group Inc. has agreed to pay $30 million to resolve allegations that they violated the False Claims Act by engaging in a kickback scheme related to the referral of nursing home businesses, the Justice Department announced last week.  

RehabCare allegedly arranged to obtain Rehab Systems of Missouri’s contracts to provide therapy to patients residing in 60 nursing homes controlled by Rehab Systems majority-owner James Lincoln. In exchange for this stream of referrals, RehabCare allegedly paid Rehab Systems a $400,000 to $600,000 upfront payment and allowed Rehab Systems to retain a percentage of the revenue generated by each referral.  

Additionally, as part of this settlement, the entities have agreed to restructure their business arrangement.

The lawsuit was originally filed by a competing therapy provider under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. The unnamed whistleblower will receive a total of $ $700,000 as their portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.