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OIG Imposes Largest Penalty for Non-Compliance with CIA Requirements

Kindred Healthcare, Inc. (Kindred), the nation’s largest provider of post-acute care, including hospice and home health services, recently paid a penalty of more than $3 million for failing to comply with a Corporate Integrity Agreement (CIA). To date, the penalty imposed on Kindred is the largest for such a violation. The penalty resulted from Kindred’s failure to correct improper billing practices in the organization’s fourth year of its five-year CIA. The Department of Health and Human Services Office of Inspector General (OIG) made several unannounced site visits to Kindred facilities and found ongoing violations. Required audits performed on-site found that Kindred failed to implement policies and procedures required by the CIA, resulting in poor claims submission practices which led to significant error rates and overpayments by Medicare.  Kindred had been billing Medicare for “hospice care” of patients who were either ineligible for those services or who were not eligible for the highest level and most highly paid category of service billed for. As a result of the CIA-required claims audit findings, Kindred decided to close 18 sites that it characterized as “underperforming” since March 2015. The company has paid a penalty of $3,073,961.98 and has taken significant corrective actions this year, including actions to upgrade its internal audits and investigations as well as its methods for tracking resolutions of identified issues.

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The Medicare hospice benefit covers services for beneficiaries with terminal illnesses who have life expectancies of six months or less. When patients elect hospice, they agree to stop receiving curative treatment and to receive palliative care in its place. Benefits are largely for pain relief, respite care, and grief counseling for the patient and the family. Benefits can be provided in a person’s home or an inpatient hospice facility.

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