Chipley Therapy Practice to Pay Over $750K to Settle Alleged False Claims Act Violations

In a significant healthcare fraud settlement, a Florida-based physical therapy practice has agreed to pay over $750,000 to resolve allegations that it systematically submitted false claims to federal programs over a five-year period.

Federal prosecutors from the Northern District of Florida announced that Chipley Physical Therapy, LLC and its affiliated business, Absolute Physical & Aquatic Therapy, will pay $754,722.88 to settle claims that they violated the False Claims Act, a key federal statute designed to combat fraud against government programs.

The investigation centered on the activities of Ruben and Lorrie Laurel, who own and operate the therapy practices serving the rural communities of Chipley, Marianna, and Bonifay in Florida’s Panhandle region. Ruben Laurel owns Chipley Physical Therapy with his wife Lorrie and holds a partial ownership stake in Absolute Physical & Aquatic Therapy.

According to federal authorities, the businesses submitted more than 500 fraudulent billing claims for therapy services allegedly performed by Lorrie Laurel between 2019 and 2024. What made these claims particularly problematic was that prosecutors determined Lorrie Laurel was actually vacationing on cruises to Mexico, Jamaica, Aruba, and the Bahamas during the times she supposedly provided these services.

The False Claims Act, originally enacted during the Civil War and substantially strengthened in 1986, is the government’s primary civil tool for combating healthcare fraud. The law imposes triple damages and substantial civil penalties on providers who knowingly submit false claims to Medicare, Medicaid, and other federal healthcare programs.

Healthcare fraud has become a persistent challenge for the U.S. healthcare system, with the Department of Justice recovering more than $2.2 billion from False Claims Act cases in the healthcare sector during fiscal year 2023 alone. Small providers in rural areas are increasingly facing scrutiny as federal authorities expand their enforcement efforts beyond major hospital systems and pharmaceutical companies.

The settlement represents a significant financial blow to the practices, which primarily serve the less populated regions of Florida’s northern counties. Physical therapy practices in rural areas often operate on thinner margins while serving Medicare and Medicaid populations, making compliance with federal regulations crucial for their survival.

This case highlights the sophisticated data analysis techniques now employed by federal investigators, who can track billing patterns and compare them against other records—such as international travel data—to identify potentially fraudulent claims.

Neither the Laurels nor representatives from either practice have issued public statements regarding the settlement. As is typical in such agreements, the settlement likely includes no formal admission of liability by the defendants, though the substantial payment amount suggests the government had built a compelling case.

The Florida case also illustrates the growing trend of enforcement actions against therapy providers. Physical and occupational therapy services have become targets for increased oversight due to their high utilization rates and what regulators have identified as problematic billing practices across the industry.

For patients in the affected communities, the settlement raises questions about the consistency and legitimacy of care provided by these practices, which offer essential rehabilitation services in areas where healthcare options may already be limited.

The Department of Justice continues to emphasize that combating healthcare fraud remains a top priority, particularly in cases involving frontline providers who directly bill federal programs for services that were either not provided or provided in a manner inconsistent with billing requirements.