Extendicare Health Services Inc. Agrees to Pay $38 Million to Settle False Claims Act Allegations Relating to the Provision of Substandard Nursing Care and Medically Unnecessary Rehabilitation Therapy | WPN World People News

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. 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.

“Our seniors rely on the Medicare and Medicaid programs to provide them with quality care, ensuring that they are treated with dignity and respect when they are most vulnerable,” said Acting Associate Attorney General Stuart F. Delery. “It is critically important that we confront nursing home operators who put their own economic gain ahead of the needs of their residents. Operators who bill Medicare and Medicaid while failing to provide essential services or bill for services so grossly substandard as to be effectively worthless will be pursued for false claims.”

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.

“The continued viability of Medicare depends, in large part, on the honesty and integrity of the program participants,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division. “Health care providers must make decisions regarding the level of services to be provided based solely on their patients’ clinical needs, and not corporate financial targets.”

“This investigation and settlement highlights the importance of leveraging the joint resources and expertise of the states and federal government,” said Ohio Attorney General Mike DeWine. “Working together allowed us to focus our efforts nationally on protecting the most vulnerable in our population who rely on quality care in our nursing homes.”

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 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.

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.

“This case demonstrates that the government will aggressively pursue allegations of abuse and grossly deficient care,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Our five-year corporate integrity agreement with Extendicare requires a government-selected quality of care monitor be retained by Extendicare, and additional rigorous provisions designed to ensure Extendicare provides appropriate staffing and monitors the quality of care provided to its residents.”

Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery. Two relators brought separate cases against Extendicare. Relator Tracy Lovvron will receive more than $1.8 million as her share of the recovery in the RUGS upcoding case, and Relator Donald Gallick will receive more than $250,000 as his share of the recovery in the Ohio worthless services case.

Source: U.S. Department of Justice