Genesis HealthCare Inc., one of the largest providers of skilled nursing and rehabilitation services in the U.S., will pay the federal government $53.6 million to settle False Claims Act (FCA) claims that its subsidiaries provided medically unnecessary and “grossly substandard” care. The U.S. Department of Justice (DOJ) announced the settlement on June 16.
The settlement ends six federal lawsuits and investigations into the submission of false claims by companies and facilities acquired by Genesis. The qui tam lawsuits were brought by seven whistleblowers who once worked for those companies. According to the DOJ, the named Plaintiffs will receive a combined $9.67 million as part of the settlement. Special Agent in Charge Steven J. Ryan, of the U.S. Department of Health and Human Services’ Office of Inspector General, said in a statement:
It’s disturbing when health care companies bill Medicare and Medicaid to care for vulnerable patients, but provide grossly substandard care and medically unnecessary services just to boost company profits. We will continue to crack down on medical providers who betray the public’s trust and the needs of vulnerable patients through fraudulent billing and irresponsible practices.
Genesis, which is based in Kennett Square, Pennsylvania, owns and operates skilled nursing facilities, assisted-living and senior homes, and rehabilitation therapy businesses. The settlement resolves four sets of claims:
• The first set of allegations involves claims that Skilled Healthcare Group (SHG), which Genesis acquired after the conduct at issue, along with its subsidiaries Skilled Healthcare LLC and Creekside Hospice II LLC, knowingly submitted false claims to Medicare for services performed at Creekside’s facility in Las Vegas. SHG allegedly billed for hospice services for patients who were ineligible because they weren’t terminally ill, and inappropriately billed for certain physician evaluation management services.
• The second set involves SHG and its subsidiaries Skilled LLC and Hallmark Rehabilitation GP LLC being accused of submitting false claims to Medicare, Tricare and Medicaid by providing therapy to patients longer than was medically necessary or billing for more time than the patients were actually treated. These claims were allegedly submitted between the start of 2005 and the end of 2013.
Medicare reimburses skilled nursing facilities based on a patient’s Resource Utilization Group (RUG) level – which is determined by the amount of skilled therapy a patient requires – and it was also claimed that SHG, Skilled LLC and Hallmark fraudulently upped patients’ RUG levels to get more money.
• The third set of claims by the whistleblowers was that Sun Healthcare Group Inc., SunDance Rehabilitation Agency Inc. and SunDance Rehabilitation Corp., which Genesis acquired in December 2012, sent false claims to Medicare Part B between Jan. 1, 2008, and Sept. 27, 2013. These claims involved billing for outpatient therapy services in Georgia that weren’t necessary or were unskilled.
• The fourth and final set of claims involves claims that between Sept. 1, 2003, and Jan. 3, 2010, Skilled LLC sent false claims to Medicare and Medi-Cal programs from certain nursing homes in an effort to collect on services that were ineligible for payment because they were grossly substandard or otherwise worthless.
Specifically, the services violated requirements that facilities must meet in order to receive reimbursement from government health care programs. Skilled LLC also failed to provide enough nurses to meet its residents’ needs.
It’s good to see the FCA being used effectively in the area of health care fraud. John Horn, U.S. Attorney for the Northern District of Georgia, said in a statement:
Health care providers that falsify claims for unauthorized or unnecessary services steal precious taxpayer dollars, and we will aggressively seek to recover those funds for the program that needs them.
The cases are Cretney-Tsosie et al. v. Creekside Hospice II LLC (case number 2:13-cv-00167,) in the U.S. District Court for the District of Nevada; McAree v. SunDance Rehabilitation Corp. (case number 1:12-cv-04244) in the U.S. District Court for the Northern District of Georgia; West v. Skilled Healthcare Group Inc. et al. (case number 3:11-cv-02658) in the U.S. District Court for the Northern District of California; Deaton v. Skilled Healthcare Group Inc. et al. (case number 4:14-cv-00219) in the U.S. District Court for the Western District of Missouri; and Wilson v. Skilled Healthcare Group Inc. et al. (case number 4:14-cv-00860) also in the U.S. District Court for the Western District of Missouri.
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