LOUISVILLE, Ky.--(BUSINESS WIRE)--Jan. 12, 2016--
Kindred Healthcare, Inc. (the “Company”) (NYSE:KND) today announced that
it has entered into a settlement agreement with the United States
Department of Justice (the “DOJ”) regarding a previously disclosed
investigation of RehabCare Group, Inc. (“RehabCare”), a therapy services
company acquired by the Company on June 1, 2011.
The settlement agreement, which relates to allegations that
rehabilitation therapy services provided to patients in skilled nursing
centers were not delivered or billed in accordance with Medicare
requirements, includes a payment to the government of $125 million plus
accrued interest from August 31, 2015, at the rate of 1.875% per annum.
The Company expects to make the payment during the first quarter of
2016. The settlement agreement resolves the DOJ’s review of RehabCare’s
business practices, mostly involving conduct which occurred prior to the
Company’s 2011 acquisition of RehabCare.
The Company previously recorded a loss reserve of $125 million related
to this matter. The Company has recorded an additional loss reserve of
approximately $2 million in the fourth quarter of 2015 related to the
settlement agreement and associated costs and, in connection with
establishing the final terms of the settlement agreement, the Company
also intends to record an income tax benefit in the fourth quarter of
RehabCare has denied engaging in any illegal activity, but in order to
provide clarity for contract customers, shareholders, and government
oversight entities, RehabCare agreed to the settlement without any
admission of wrongdoing. The settlement will serve to avoid the cost and
distraction of protracted litigation.
The Company believes that the settlement agreement fully and finally
resolves the DOJ’s investigation of RehabCare previously described in
the Company’s periodic filings with the Securities and Exchange
Commission (the “SEC”). The settlement agreement has been approved by
the DOJ and the Office of Inspector General of the Department of Health
and Human Services (the “OIG”). In connection with the settlement, the
Company has also entered into a Corporate Integrity Agreement with the
OIG related to the provision of contract rehabilitation therapy services.
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements include, but are not limited to, all
statements regarding the Company’s expected future financial position,
results of operations, cash flows, dividends, financing plans, business
strategy, budgets, capital expenditures, competitive positions, growth
opportunities, plans and objectives of management, government
investigations, regulatory matters, and statements containing the words
such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,”
“expect,” “project,” “could,” “would,” “should,” “will,” “intend,”
“may,” “potential,” “upside,” and other similar expressions. Statements
in this press release concerning the Company’s business outlook or
future economic performance, anticipated profitability, revenues,
expenses, dividends or other financial items, product or services line
growth, and expected outcome of government investigations and other
regulatory matters, together with other statements that are not
historical facts, are forward-looking statements that are estimates
reflecting the best judgment of the Company based upon currently
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that actual
results may differ materially from the Company’s expectations as a
result of a variety of factors. Such forward-looking statements are
based upon management’s current expectations and include known and
unknown risks, uncertainties and other factors, many of which the
Company is unable to predict or control, that may cause the Company’s
actual results, performance or plans to differ materially from any
future results, performance or plans expressed or implied by such
forward-looking statements. These statements involve risks,
uncertainties and other factors detailed from time to time in the
Company’s filings with the SEC.
Factors that may affect the Company’s plans, results or stock price are
set forth in the Company’s Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K.
Many of these factors are beyond the Company’s control. The Company
cautions investors that any forward-looking statements made by the
Company are not guarantees of future performance. The Company disclaims
any obligation to update any such factors or to announce publicly the
results of any revisions to any of the forward-looking statements to
reflect future events or developments.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160112006190/en/
Source: Kindred Healthcare, Inc.
Kindred Healthcare, Inc.
Susan E. Moss, 502-596-7296
Vice President, Marketing and Communications