Team Rehabilitation Services, LLC agreed to a $4.9 million settlement after federal authorities said the company billed time-based, one-to-one physical therapy CPT codes for services provided in group settings across several federal health programs between January 1, 2018, and December 31, 2024.
Team Rehabilitation Services operated roughly 140 physical therapy clinics across Michigan, Illinois, Indiana, Wisconsin, and Georgia, according to the settlement. The company provided a range of outpatient therapy services and billed multiple federal programs for those services over several years.
Federal billing rules rely on Current Procedural Terminology codes, and some CPT codes require billing based on the amount of direct, one-to-one time a clinician spends with a patient. Time-based codes are intended to reflect actual clinician-patient interaction, and certain codes are inappropriate if the service was delivered in a group or without continuous individual attention.
The government’s allegation covers the period from January 1, 2018, through December 31, 2024, and identifies claims submitted to Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Department of Veterans Affairs. Prosecutors said Team Rehab knowingly billed time-based, one-to-one CPT codes even when therapists provided services in group settings and did not maintain the sustained direct contact required to justify those codes.
The civil resolution required Team Rehabilitation to pay $4.9 million to resolve the False Claims Act allegations, and the company cooperated after the investigation began. Officials say Team Rehab self-identified improper claims and implemented additional compliance measures to reduce the risk of future billing errors and to tighten internal review of coded services.
“Improperly billing federal healthcare programs depletes valuable resources and erodes public trust,” said U.S. Attorney Jerome F. Gorgon. “This case is further proof that this office will continue to aggressively root out fraud, waste, and abuse in our healthcare system.” The statement underscores the Justice Department’s focus on policing billing practices that affect taxpayer-funded benefits.
“Protecting the integrity of the TRICARE program and ensuring responsible stewardship of taxpayer dollars are top priorities for the Defense Health Agency. This settlement sends a clear message that we will not tolerate practices that exploit the program and inflate costs at the expense of our service members, veterans, and their families,” said Dr. David Krulak, director, TRICARE Health Plan, Defense Health Agency. That comment highlights concern for beneficiaries who rely on federal health programs for care.
The matter originated from a sealed qui tam whistleblower suit filed under the False Claims Act, captioned United States ex rel. Thornton v. Team Rehabilitation Physical Therapy, No. 2:23-cv-11592 (E.D. Mich.). Under those provisions, a private relator can bring suit on the government’s behalf and share in any recovery, and the whistleblower in this case will receive $919,356 of the settlement proceeds.
“Taxpayers pay the price when medical services under federal health care programs are improperly billed,” said Derek M. Holt, Special Agent in Charge at the U.S. Office of Personnel Management Office of the Inspector General. “We are grateful to our colleagues at the Department of Justice for continuing to pursue accountability for these actions and protecting the integrity of programs like the FEHBP.” That quote reflects investigators’ view that enforcement is essential to protect program solvency.
The resolution followed a coordinated investigation by multiple oversight and law enforcement offices, including the Department of Health and Human Services Office of Inspector General, the Defense Criminal Investigative Service, and the Department of Veterans Affairs Office of Inspector General. The United States Attorney’s Office for the Eastern District of Michigan and the Michigan Attorney General Health Care Fraud Division also participated, and Assistant United States Attorney Anthony Gentner handled the matter for the United States.
