Extendicare Settles Health Care False Claims for $38M; Whistleblowers Get $1.8M and $250K
Extendicare Health Services has agreed to pay $38 million to the federal government and eight state governments to resolve allegations that the company knowingly submitted or caused the submission of false claims to Medicare and Medicaid for worthless nursing services and medically unreasonable and unnecessary rehabilitation therapy services, the U.S. Department of Justice announced today. Extendicare, through its subsidiaries, operates 146 skilled nursing facilities in 11 states. Its subsidiary ProStep provides physical, speech, and occupational rehabilitation services.
This settlement resolves allegations that Extendicare billed Medicare and Medicaid for materially substandard skilled nursing services and failed to provide care to its residents that met federal and state standards of care and regulatory requirements. The government alleges, for example, that Extendicare failed to have a sufficient number of skilled nurses to adequately care for its skilled nursing residents; failed to provide adequate catheter care to some of the residents, and failed to follow the appropriate protocols to prevent pressure ulcers or falls. The eight states involved in this component of the settlement are Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.
Additionally, this settlement resolves allegations that Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services to its Medicare Part A beneficiaries, particularly during the patients’ assessment reference periods, so that it could bill Medicare for those patients at the highest per diem rate possible.
As a result of today’s settlement, the federal government will receive $32.3 million and the eight state Medicaid programs will receive $5.7 million. In addition, as part of this resolution, Extendicare and ProStep are required to enter into a five year chain-wide Corporate Integrity Agreement under which Extendicare must have a comprehensive compliance program with systems to address the quality of resident care. Extendicare’s compliance program must include, among other things, corporate-level committees to address compliance and quality, including a committee to assess staffing, and an internal audit program to assess the quality of care provided to its residents. Extendicare must retain an independent monitor, selected by the OIG, who will regularly visit Extendicare’s facilities and report to the OIG. In addition, an independent review organization will perform annual reviews of Extendicare’s claims to Medicare.
The two lawsuits, filed separately, were originally brought by Tracy Lovvron and Donald Galick, both former employees of Extendicare. The False Claims Act allows private parties with knowledge of fraud against the government to sue on the government’s behalf and share in the recovery. Lovvron will receive $1.8 million as her portion of the settlement, while Galick will receive over $250,000.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.