Kindred hit with record-setting $3 million penalty for failing to comply with OIG agreement

The nation's largest post-acute care provider has paid more than $3 million in penalties after failing to comply with a federal corporate integrity agreement, authorities announced Tuesday.

Audits discovered that Kindred Health Care Inc., and its predecessors failed to correct improper billing practices required by its five-year corporate integrity agreement, which led to high error rates and overpayments by Medicare. Kindred was found to be submitting Medicare claims for hospice care for beneficiaries who were ineligible for hospice services, according to the Department of Health and Human Services' Office of Inspector General.

"This penalty should send a signal to providers that failure to implement these requirements will have serious consequences," said HHS Inspector General Daniel R. Levinson.

The fine marks the largest-ever penalty for violating a CIA, the OIG said. The agreement was the result of a $25 million settlement with Gentiva Healthcare, which Kindred acquired in 2014.

“Since that acquisition, Kindred has, in collaboration with the OIG, taken significant corrective actions, including upgrading internal audits and investigations and tracking resolutions of identified issues,” Susan Moss, senior vice president of marketing and communications for Kindred, told Modern Healthcare.

Kindred also will close 18 “underperforming” sites as a result of the audits, the OIG said.

Kindred is the largest post-acute care provider in the United States, with services including hospice, home care and rehabilitation centers. As of June 2016, the company operated 90 skilled nursing facilities totaling to more than 11,000 beds.