U.S. ex rel. Health Dimensions Rehab., Inc. v. Rehabcare Group, Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Health Dimensions Rehab., Inc. v. Rehabcare Group, Inc., No. 4:12CV00848 AGF (E.D. Mo. Mar. 13, 2013)

The United States District Court for the Eastern District of Missouri denied motions to dismiss made by defendants in a false claims lawsuit that involved rehabilitation services provided to skilled nursing facility patients.  The government sued on the basis of a five-year subcontract agreement between two contract providers of rehabilitation therapy services which involved a one-time payment of $600,000 followed by a percentage of the profit from the therapy services that would be performed, an arrangement that the government alleged resulted in over $10 million in kickbacks. 

The district court held that the motions to dismiss were without merit and that there were no logical inconsistencies between the government’s allegation that the contracting rehab services provider ceased operations shortly after receiving its $600,000 payment and its allegation that the provider continued to receive a percentage of remuneration for such services, finding that the government pled sufficient facts to state a claim under the False Claims Act.