California Nursing Home Operator Settles False Claims Act Lawsuit for $48 Million

December 23, 2013 — What can health care workers do to stop our nation’s Medicare program from being deluged with fraudulent claims filed by hospitals, doctors and other health care providers? To tackle the problem, the government relies on tips from health care insiders. The False Claims Act incorporates qui tam language that allows conscientious tipsters to bring a lawsuit for the benefit of the government. To incentivize whistleblowers to come forward, the statute entitles tipsters to a share of the recovery.

Whistleblower Lawsuit Alleged Six California Nursing Homes Made False Claims to Medicare for Unnecessary Therapy

The Ensign Group Inc., a California provider operating nursing homes in the western U.S., will pay $48 million to settle allegations that the company submitted false claims to Medicare for rehabilitation therapy services that were medically unnecessary. Two whistleblowers who formerly worked for Ensign named six California skilled nursing facilities in a False Claims Act lawsuit:

  • Huntington Beach – Sea Cliff Healthcare Center;
  • Long Beach – Atlantic Memorial Healthcare Center;
  • Norwalk – Southland;
  • Panorama City – Panorama Gardens;
  • Ventura – Victoria Care Center; and
  • Whittier – The Orchard Post-Acute Care (a.k.a. Royal Court).

From 1999 to 2011, these six Ensign nursing homes allegedly filed false claims with Medicare for physical, speech and occupational therapy services provided to patients whose diagnoses did not warrant the services. According to the U.S. Justice Department, Ensign also kept patients in its facilities for time periods exceeding what was medically required to treat patients’ conditions.

Ensign allegedly created a corporate culture in which therapists were improperly paid to boost the amount of therapy given to facility patients as a means of achieving planned Medicare revenue. Medicare targets were established without reference to patient’s actual needs and were impossible to achieve without billing Medicare at the highest reimbursement levels.

The tipsters who notified the government of the alleged abuses were two former Ensign therapists who filed False Claims Act lawsuits under the statute’s qui tam provisions. Carol Sanchez and Gloria Patterson will share in the government’s $48 million settlement, though the specific amounts they will receive have not yet been determined.

Blowing the Whistle on Medicare Fraud

Most health care insiders want no part in a Medicare fraud scheme. These honest workers deserve to understand their rights as provided in the False Claims Act before they file suit. With experienced whistleblower lawyers in California — where the False Claims Act violations alleged in this case took place — and in Texas and Maryland, Waters & Kraus understands how to safeguard your interests. When it’s time to notify the government, contact us by email or phone our False Claims Act lawyers at 855.784.0268 to find out more about our Medicare fraud practice.

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