Nursing home chain pays $48 million to settle allegations of billing for unnecessary treatments

by Ben Vernia | November 20th, 2013

On November 19, the Department of Justice announced a settlement in an investigation of The Ensign Group, Inc., which was launched by two whistleblower cases filed in California. The company will pay $48 million to resolve the False Claims Act allegations. According to DOJ’s press release:

The Ensign Group Inc., a skilled nursing provider based in Mission Viejo, Calif., that operates nursing homes across the western U.S. has agreed to pay $48 million to resolve allegations that it knowingly submitted to Medicare false claims for medically unnecessary rehabilitation therapy services, the Justice Department announced today. Six of Ensign’s skilled nursing facilities in California allegedly submitted the false claims: Atlantic Memorial Healthcare Center, located in Long Beach; Panorama Gardens, located in Panorama City; The Orchard Post-Acute Care (a.k.a. Royal Court), located in Whittier; Sea Cliff Healthcare Center, located in Huntington Beach; Southland, located in Norwalk; and Victoria Care Center, located in Ventura.

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Between January 1, 1999, and August 31, 2011, these six Ensign skilled nursing facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary. Specifically, Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare. The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue. These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels. The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions.

In addition, the government announced that the company has accepted a five-year Corporate Integrity Agreement with the Office of Inspector General of HHS.

The government wrote that the relators’ share of the proceeds has not been determined.

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