Industry News

Post Acute Medical Pays $13.16 Million to Settle False Claims Act Allegations.

The Department of Justice (DOJ) recently announced that it has reached a $13,168,000 False Claims Act settlement with Post Acute Medical, LLC (Post Acute Medical).  The Pennsylvania-based company operates long-term care and rehabilitation hospitals across the country.  Post Acute Medical agreed to settle with the United States, Texas, and Louisiana for allegations that it violated the federal False Claims Act and the Texas and Louisiana false claims statutes.  Allegedly, Post Acute Medical’s actions triggered these statutes because it knowingly submitted claims to the Medicare and Medicaid programs in violation of the Anti-Kickback Statute (AKS) and Physician Self-Referral Law, also known as the Stark Law.

Post Acute Medical allegedly entered into physician services contracts, on behalf of its hospitals, that were intended to induce the physicians to refer patients to Post Acute Medical’s facilities in violation of the Stark Law.  The Stark Law prohibits physicians from referring Medicare patients for designated health services to entities with which the physician has a financial relationship.  The AKS was also allegedly violated when Post Acute Medical entered into “reciprocal referral relationships” with unaffiliated health care providers.  These providers would refer patients to Post Acute Medical facilities in return for their referrals.  The AKS prohibits offering or paying anything of value that encourages the referral of items or services covered by federally funded health care programs such as Medicare or Medicaid.  It also prohibits entities from submitting claims for the designated health services resulting from such prohibited referrals.

The settlement was the result of a whistleblower action filed under the federal False Claims Act, which allows the whistleblower to file a suit on behalf of the Federal Government  and obtain a portion of the recovery.  The whistleblower will receive $2,345,670 of the recovery, with the United States receiving $13,031,502, Texas receiving $114,016, and Louisiana receiving $22,482 from the settlement.  Post Acute Medical also agreed to enter into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General that includes an arrangements review by an Independent Review Organization.

The full DOJ press release is available at: