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RehabCare Accused of Nursing Home Kickback Scheme

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According to a whistleblower lawsuit transferred to U.S. District Court in St. Louis last week, RehabCare Group Inc paid a Missouri nursing home some $10 million in kickbacks for access to Medicaid and Medicare residents for physical therapy. The U.S. Department of Justice joined the lawsuit last year.

Health Systems Inc., which owns the nursing home, and its affiliate Rehab Systems were also named as defendants in the lawsuit. According to government investigators, RehabCare formed an illegal business arrangement with Health Systems and Rehab Systems which included a one-time payment of more than a half million dollars, as well as continuous payments of 30 percent of therapy services. For this, the lawsuit claims, RehabCare was given a five-year therapy service contract for nursing home residents.

The federal anti-kickback statute prohibits anyone from pay for or receiving “any renumeration” for referrals of Medicaid and Medicare recipients. According to investigators, RehabCare “has received in excess of $70 million in revenue” from the illegal maneuvers since 2006.

The lawsuit seeks treble damages plus civil penalties of up to $50,000 per false claim, St. Louis Today reports. disclaimer: This article: RehabCare Accused of Nursing Home Kickback Scheme was posted on Thursday, May 17th, 2012 at 8:13 pm at and is filed under Fraud Lawsuits, Nursing Home Abuse Lawsuits.

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