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Company fined for billing Medicare for unnecessary treatments

Most people consider Medicare to be an incredibly worthwhile insurance option for those who require affordable health care. That's because Medicare will pay for many of the medical treatments enrolled patients need. Medicare is then billed, and the health care facility that conducted the treatments is then paid back for its services.

Hospitals, nursing homes and health care facilities need to be careful, however, when it comes to billing Medicare for these treatments. That's because the federal government takes fraudulent billing very seriously. If the government suspects fraud, it will take legal action against the offending company.

Our New York readers can see this illustrated by a recent case involving Kindred Healthcare Inc., a company that provides post-acute care services to patients here in the United States. According to news sources, Kindred agreed to a settlement with the federal government rather than go through costly litigation. Though the company insists it did nothing wrong, it has agreed to pay the federal government $125 million – a fine for allegedly "provid[ing] unnecessary therapy services to nursing-home patients" then overbilling Medicare.

Cases like this show just one of the steep costs associated with allegations of this magnitude: large fines. Depending on how this case unfolds in the future, other costs may include further penalties if Kindred does not comply with the terms of the settlement and damage to the company's reputation.

For businesses in New York, litigation stemming from allegations of wrongdoing, be they from individuals or the federal government, should always be taken seriously as they can lead to lengthy trials and costly outcomes.

Though it's important to put forward a strong defense when facing allegations like the ones above, it may be impossible to create a strong defense without the help of a lawyer. That's why, in cases like this, it's a good idea to talk to a lawyer who understands business law as well as how to defend companies against legal actions.

Source: The Wall Street Journal, "Kindred Healthcare to Pay $125 million to Settle U.S. Allegations Over Therapy Services," Christopher Weaver, Jan. 12, 2015

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