Lafayette-based LHC Group Inc., a home health provider, will pay the federal government $65 million to settle a federal investigation into the company's Medicare billing practices from 2006 to 2008.
LHC did not admit any wrongdoing and continues to dispute the government claims, the company said. The dispute involved medical records contained enough documentation to support the need for home health treatments.
The company said it chose to settle, in part, to avoide the expense of a multi-year legal fight with the government, which is both a regulator and the primary payer for healthcare services provided to elderly and disabled patients. The Justice Department investigation grew out of a complaint filed in federal court in Lafayette under the federal false claims act. That complaint had been sealed, according to LHC's second-quarter report.
LHC said the complaint was filed by a subcontractor who worked for a regional consulting firm LHC used to support the home health company's quality inititatives.
In its quarterly report, LHC said it had hired consultants to help the company respond to the Justice Department investigation.
"Although the Company and its consultants are continuing to review the medical records at issue in the investigation, the issues raised by the government are complex and there can be no assurance that it will agree with our analysis," LHC said in the report.
LHC said it could not predict the outcome of the investigation but "it is reasonably possible the outcome could be meaterial to the company's operations and results."
LHC said it could not estimate the potential loss at the time. The company did not reserve any money to cover the potential loss.
LHC was also one of four publicly traded home health companies under investigation by the U.S. Senate Finance Committee, the Securities and Exchange Commission, and the U.S. Department of Justice.
The first two inquiries were launched after an analysis of home health reimbursements by The Wall Street Journal questioned whether the firms ordered unnecessary patient visits in order to collect thousands of dollars in bonuses from Medicare.
LHC Group said it has an untouched $75 million line of credit. The company plans to use roughly $40 million from its credit line and $25 million in cash to cover the settlement.