by Ben Vernia | October 10th, 2014
On October 10, the Department of Justice announced that it had settled a variety of allegations against the nursing home rehabilitation services company, Extendicare, for $38 million. The company also agreed to a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. According to DOJ’s press release:
Extendicare Health Services Inc. (Extendicare) and its subsidiary Progressive Step Corporation (ProStep) have agreed to pay $38 million to the United States and eight states to resolve allegations that Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services, the Justice Department and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) jointly announced today. This resolution is the largest failure of care settlement with a chain-wide skilled nursing facility in the department’s history.
As part of this settlement, Extendicare has also been required to enter into a five year chain-wide Corporate Integrity Agreement with HHS-OIG. Extendicare is a Delaware corporation that, through its subsidiaries, operates 146 skilled nursing facilities in 11 states. ProStep provides physical, speech, and occupational rehabilitation services.
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This settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes in eight states, 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.
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Additionally, this settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes, 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. The Medicaid program is funded jointly by the federal and state governments.
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In addition, as part of this resolution, Extendicare and ProStep are required to enter into a five year chain-wide Corporate Integrity Agreement. It is a priority of the OIG to investigate and pursue cases involving abuse or grossly deficient care of Medicare or Medicaid beneficiaries and to recommend improvements to the systems intended to promote quality of care. To protect the Federal healthcare programs and its beneficiaries, OIG required Extendicare to agree to a 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.
DOJ announced that one relator will receive $1.8 million, and another will receive $250,000, for two different whistleblower cases.
