UPDATE: Amedisys Reports Finalized Settlement with Gov't, Will Fund Settlement with Cash on Hand, Credit Facility

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Amedisys, Inc.
AMED
, one of America's leading home health and hospice care companies, announced today that the company has finalized its previously announced settlement to bring to an end the civil investigation brought by the U.S. Department of Justice ("DOJ"). Amedisys has fully cooperated with the DOJ civil investigation, which involved Medicare reimbursement for home health services provided by certain Amedisys care centers from January 1, 2008 through December 31, 2010. The settlement also resolves a previously disclosed Stark Law issue regarding care coordination services provided to a physician practice group in exchange for compensation that was not consistent with fair market value during the period April 1, 2008 through April 30, 2012, which the company voluntarily self-disclosed to the Centers for Medicare and Medicaid Services. As previously announced, although Amedisys disputed the DOJ's allegations of misconduct, it decided to settle to avoid the cost and uncertainty inherent in protracted litigation. The DOJ investigation primarily centered on determinations made by Amedisys clinicians and independent physicians that patients were homebound and needed skilled nursing or therapy services, and that the services provided were medically necessary. Each year, Amedisys' dedicated clinicians provide care to more than 360,000 patients, many of whom suffer from more than one chronic and debilitating disease. Amedisys maintains that it operated according to stringent policies requiring that home health nursing and therapy services be delivered to qualifying patients having a medical need for such care, and only upon the direction of their physicians. Amedisys provides extensive training to its clinicians concerning these requirements and has made significant investments in its compliance program, which has been designed to comport with guidelines established by the Office of Inspector General, United States Department of Health and Human Services. The final Settlement Agreement reflects Amedisys' disagreement with the DOJ's claims and includes no admission or determination of wrongdoing. "We are pleased to put this matter behind us," stated Ronald A. LaBorde, President and Interim Chief Executive Officer. "We are intensely focused on achieving the best possible outcomes for our patients by providing the care they need, when they need it, in the comfort of their own homes. We strive diligently to ensure that our operations are fully compliant with Medicare program requirements." Under the terms of the civil settlement, and as disclosed previously, Amedisys will pay a total of $150 million plus interest in two installments. The first installment of $115 million plus interest must be paid by May 2, 2014, and the remaining $35 million plus interest must be paid by October 23, 2014. The company will fund the settlement through cash on hand and draws upon its existing credit facility. Amedisys took the charge associated with the settlement in the third quarter of 2013. In addition to the amount to be paid to the United States, the company will be responsible for payment of attorneys' fees and expenses of various qui tam relators in the amount of approximately $3.9 million, which will be recorded in the first quarter of 2014. 
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