Lawsuit accuses St. Louis rehab firm of fraud -

Lawsuit accuses St. Louis rehab firm of fraud

ST. LOUIS -- A civil lawsuit filed by the Justice Department in St. Louis accuses the therapy provider RehabCare Group Inc. of paying more than $10 million in kickbacks to gain access to nursing home Medicare and Medicaid patients.

The St. Louis Post-Dispatch reports that suburban St. Louis-based RehabCare is accused of a revenue-sharing agreement with nursing home chain owner Health Systems Inc. that defrauded Medicare and Medicaid programs.

Federal investigators say RehabCare crafted an illegal arrangement with Health Systems of Sikeston, Mo., and its affiliate Rehab Systems that included a one-time, $600,000 payment and an ongoing 30 percent cut of federally financed therapy services.

RehabCare was purchased last year by Louisville, Ky.-based Kindred Healthcare Inc., which denies the allegations.

A lawyer for Health Systems declined comment.

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