Earlier this week, the HHS Office of Inspector General (OIG) issued its largest ever penalty, approximately $3 million, for violations of a Corporate Integrity Agreement (CIA). OIG typically requires a CIA as part of resolution of a False Claims Act case in order for the defendant company to avoid exclusion under government health care programs. In this case, Kindred Health Care, the largest provider of home health and hospice care services in the Nation, assumed a CIA when it acquired Gentiva Healthcare. Gentiva’s subsidiary had resolved a False Claims Act case based upon improper billing of Medicare for hospice-related care in 2012 for a payment of $25 million and agreement to a CIA.
Kindred performed required audits through internal auditors, and these audits found, in 2013 through 2015, that not only had Kindred failed to implement policies and procedures required by the CIA, but also that Kindred’s poor claims submission practices had caused overpayments by Medicare. As a result, OIG assessed a penalty of $3,073,961.98. Kindred subsequently closed 18 of its “underperforming” facilities.
Obviously, Kindred should have done a better job of staying on top of its compliance with the CIA, particularly given that its own auditors were raising red flags. The fact that Kindred had inherited the CIA through an acquisition likely complicated compliance efforts. Given the ongoing consolidation of the health care industry, such circumstances are becoming increasingly common, and OIG clearly is not going to give anyone a pass because a company may have become subject to a CIA through corporate transactions involving a prior False Claims Act defendant.
The frequency of health care-related False Claims Act cases have rendered CIAs a common part of the health care compliance landscape. Every entity subject to one of these Agreements must take seriously its compliance obligations throughout the life of the CIA. The Law Office of Mark L. Josephs has the expertise and capacity to assist in meeting these compliance obligations.