Kindred employees to get extra bonus
Some 50,000 employees of Kindred Healthcare Inc., one of the largest long-term care providers in the United States, will reap some financial rewards as a result of a $55 million settlement disclosed by the company this week.
Kindred said it accepted $55 million to settle a Medicare cost report dispute with Mutual of Omaha. The insurer processes Kindred's Medicare claims. The settlement was related to rent reimbursements paid following Kindred's corporate reorganization in April 2001.
Some company hospitals, for more than two years, were only partially reimbursed by Medicare under cost-based rules, Kindred said. The two parties agreed, under the terms of the settlement, that these rent payments are allowable costs in full.
Kindred should receive the cash settlement by April 30, 2006 and will report the $55 million as second-quarter income for this year. More than a third will go to employees and philanthropy. About 49,500 non-executive employees, who do not participate in incentive compensation plans, will receive one-time bonuses drawn from $15 million of the settlement, Kindred said.