SKY Rehab parent settles Medicare lawsuit with feds

The corporation that operates Southern Kentucky Rehabilitation Hospital and other long-term care and rehab facilities has agreed to a $32.7 million settlement to resolve a lawsuit alleging that the company billed Medicare for medically unnecessary services.

Vibra Healthcare, a national hospital chain headquartered in Pennsylvania, agreed to the settlement to resolve claims that the company violated the federal False Claims Act, the federal Department of Justice announced Wednesday.

"Pursuing and recovering fraudulent billing for unnecessary services is a priority of my office," U.S. Attorney John Kuhn for the Western District of Kentucky said in a news release. "This significant case against Vibra Healthcare ... is but one example of the vigorous work against health care fraud taking place in the Western District of Kentucky and across the nation."

There was no determination of liability as a result of the settlement.

As part of the settlement, Vibra agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

Federal authorities alleged that, between 2006 and 2013, Vibra admitted several patients to SKY Rehab and five of the company's long-term care hospitals who did not demonstrate signs or symptoms that would qualify them for admission.

Vibra was also alleged to have extended the stays of long-term care patients without regard to medical necessity, qualification or quality of care and to have ignored the recommendations of clinicians who deemed patients were ready for discharge.

Part of the allegations were filed in a whistleblower lawsuit in federal court in Texas by a former health information coder at Vibra Hospital of Southeastern Michigan.

The former employee will receive at least $4 million in the settlement, according to a news release from the U.S. Attorney's Office for the Western District of Kentucky, one of a number of federal entities to have handled the case.

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