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Extendicare Settles False Claims Act Lawsuits For $38 Million

November 5, 2014 — Seniors living in nursing homes rely on Medicare and Medicaid programs for quality care. When operators of large nursing home chains place corporate profits over the needs of their patients, nursing home professionals and staff are not without power to stop the abuse. The U.S. Justice Department (DOJ) relies on whistleblowers who notify the government about health care fraud by bringing a False Claims Act lawsuit. The statute’s qui tam language gives health care insiders a way to help seniors and taxpayers and be rewarded for it. Tipsters who file a lawsuit for the taxpayers’ benefit may receive a sizable share of any proceeds. Since January 2009, the U.S. Justice Department has recovered more than $14.4 billion through False Claims Act lawsuits brought by conscientious informants in health care fraud cases.

Large Nursing Home Chain That Provided Substandard And Unnecessary Care For Resident Patients Committed Medicare And Medicaid Fraud In Eight States

Extendicare Health Services Inc. (Extendicare) and Progressive Step Corporation (ProStep), Extendicare’s subsidiary, have resolved False Claims Act allegations in two lawsuits for a total of $38 million. The lawsuits alleged that Extendicare submitted false claims to Medicare and Medicaid for substandard nursing services and for medically unnecessary rehabilitation therapy services. Extendicare, a Delaware corporation, runs 146 skilled nursing facilities located in 11 states. ProStep offers speech, physical and occupational rehabilitation services. The settlement is the government’s largest in a “failure of care” case against a skilled nursing facility chain.
The federal government’s portion of the settlement is $32.3 million. The eight states whose Medicaid programs were defrauded will receive $5.7 million. Whistleblower Tracy Lovvron’s share of the settlement is more than $1.8 million for her part in resolving one of the two lawsuits. Tipster Donald Gallick will be awarded more than $250,000 for notifying the government about the substandard services provided in Ohio.
From 2007 to 2013, Extendicare provided patients in 33 skilled nursing homes located in eight states with materially substandard nursing care that failed to meet minimum federal and state regulatory requirements and standards of care. The facilities were located in Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin. The Justice Department alleged that Extendicare lacked an adequate number of nurses to treat nursing home patients, that the provider failed to adhere to procedures necessary to prevent patients from falling or developing pressure ulcers and that in some instances Extendicare treated catheterized patients with substandard care.
During the same time period, Extendicare subjected Medicare Part A beneficiaries to medically unreasonable and unnecessary rehabilitation therapy services for the purpose of billing Medicare at the highest possible per diem rate.

False Claims Act Lawsuits Target Abuse By Medical Providers

While Waters & Kraus is not handling this particular False Claims Act case, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different medical provider, contact us or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about fraudulent abuses of government-funded programs. Paul Lawrence, one of the firm’s qui tam lawyers in the Washington D.C. area office, works to protect tipsters throughout the whistleblower lawsuit process.

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