Encompass Health Corporation (NYSE: EHC) (“Encompass Health” or the “Company”) today settled a seven-year False Claims Act (“FCA”) investigation by the Department of Justice (“DOJ”), together with related qui tam or “whistleblower” lawsuits, for a settlement payment of $48 million.
| BIRMINGHAM, Ala., June 28, 2019 /PRNewswire/ -- Encompass Health Corporation (NYSE: EHC) (“Encompass Health” or the “Company”) today settled a seven-year False Claims Act (“FCA”) investigation by the Department of Justice (“DOJ”), together with related qui tam or “whistleblower” lawsuits, for a settlement payment of $48 million. In the settlement, the Company expressly denies any wrongdoing. The Company will not be subject to a Corporate Integrity Agreement (“CIA”).
In return for the settlement payment, the Company has received dismissal with prejudice of the pending qui tam claims and DOJ’s release of the Company and all its subsidiaries from liability as specified in the settlement agreement for the time period from January 1, 2006 through the date of the agreement. The Company has disclosed this matter in its public filings since 2013 and accrued a loss contingency in the amount of the final settlement in its financial statements as of December 31, 2018. The Company fully cooperated with the government’s investigation, producing voluminous documentation and submitting to over thirty depositions. The seven-year investigation produced no evidence of falsity or fraudulent conduct. Eventually, the court refused to give DOJ more time to decide whether to intervene and unsealed the related qui tam cases. DOJ did not intervene. Accordingly, the Company faced the burden and cost of litigating multiple cases with the individual plaintiffs. Mark Tarr, President and Chief Executive Officer of Encompass Health, stated, “From the beginning, we believed the allegations under investigation were without merit. The evidence establishes that Encompass Health did nothing wrong. But to stop this interminable investigation and avoid further expense, we decided it is in the best interests of Encompass Health and its shareholders to settle with DOJ and end the related litigation.” DOJ’s investigation focused on certain diagnoses made by independent physicians at Encompass Health hospitals. Encompass Health relied on the medical judgment of these independent physicians to code the diagnoses. DOJ claimed, among other things, that under Centers for Medicare and Medicaid Services (CMS) regulations Encompass Health improperly used the codes. However, CMS periodically reviewed industry usage of the codes and confirmed the Company’s reliance was appropriate. In addition, throughout the period of the investigation, CMS continued to pay the Company’s claims. Mr. Tarr noted, “This resolution confirms the propriety of the Company’s practices under CMS regulations. As always, our focus is on patient care and our commitment to compliance, ethical conduct and integrity.” About Encompass Health Forward-Looking Statement Media Contact: Investor Relations Contact:
SOURCE Encompass Health Corp. | ||
Company Codes: NYSE:EHC |
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