OIG Means It When It Says It: Kindred Healthcare, Inc. Pays Record Penalty for Violating CIA

CIAs are agreements entered into between the OIG and Medicare providers who have settled allegations of False Claims Act violations. As part of a CIA, providers agree to a number of corrective actions, including outside scrutiny of billing practices. In exchange, OIG agrees not to seek to exclude providers from participation in Medicare, Medicaid, or other Federal health care programs. It is generally considered a best practice for a provider operating under a CIA to actually perform as required by the CIA—as it’s a contract made with the federal government. Failure to do so is a violation of the agreement and may result in additional fines and penalties for the provider, as well as an extension of the CIA.

Kindred’s penalty is a case in point: it was imposed for failing to comply with a CIA that it inherited after acquiring Gentiva Health Services, Inc. in 2015. The penalty came after Kindred failed to correct improper billing practices in the fourth year of the five-year agreement (the CIA stemmed from Gentiva’s $25 million False Claims Act settlement in March 2012.)  

Under the CIA, Kindred’s internal auditors performed required audits and found that in 2013, 2014, and 2015, Kindred and Gentiva failed to follow the policies and procedures that were instituted as part of the CIA. The auditors also uncovered a number of error rates and overpayments due to poor claims submission practices. The overpayments stemmed from Kindred’s alleged billing Medicare for hospice patients who were ineligible for hospice services or who were not eligible for the highest level and service category, according to OIG.

In addition to the CIA Kindred inherited from Gentiva, Kindred also settled a separate False Claims Act proceeding for $125 million in January 2016, and entered into a second five-year CIA over accusations of inappropriate billings to Medicare made by RehabCare, Kindred’s therapy division. RehabCare was accused of scheduling inappropriate therapy sessions that were not in the best interests of its patients. Given Kindred’s performance under the March 2012 CIA, it is likely that the OIG will be keeping an even closer eye on Kindred for its compliance under the January 2016 CIA.

All providers should be on alert: if you have a CIA, follow it. And if your auditors repeatedly find that you are not following the CIA, implement a plan to reverse that finding.