FCA whistleblower settlement spotlights key Texas link

Encompass Health Corporation is a big kid on the block when it comes to offering health care services. A recent national article on the company identifies it as “the country’s largest inpatient rehabilitation provider,” with operating revenue of more than $4 billion last year.

Encompass will now have to skim a bit of that off the top and turn it over to U.S. Department of Justice officials in the wake of a fraud-linked settlement announced last week.

In fact, Encompass is now on the hook for $48 million to resolve claims that it falsely coded patient data and improperly admitted patients. DOJ spokespersons allege that it did so to retain its designation as a Medicare/Medicaid inpatient rehabilitation facility, which ensured it a comparatively high reimbursement rate.

Encompass principals signed off on the settlement while simultaneously refuting its underlying allegations. Company CEO Mark Tarr stated that his firm “did nothing wrong” and that the probe was essentially centered on a good-faith coding issue. He additionally stressed that diagnoses claimed by the government to be inaccurate were made only by independent doctors working at Encompass facilities.

The government’s probe was reportedly a comprehensive and even exhausting affair, marked by “voluminous documentation” and additional discovery processes. Tarr stressed that Encompass ultimately settled to stop what was an “interminable investigation.”

The government’s take was unsurprisingly different, with officials pointing to what they stated were multiple acts of clear wrongdoing.

The investigation was fueled by claims from multiple qui tam whistleblowers, with several lawsuits being filed under the federal False Claims Act. The probe had a close Texas tie, with one of the persons coming forward with information being a principal at an Encompass inpatient facility in Arlington.

The whistleblowers will share in the government’s recovery, collectively receiving a reported $12.4 million.