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$48 Million Settlement in Nursing Home Fraud Whistleblower Case

Most nursing homes throughout the U.S. accept residents who use Medicare and Medicaid as their health insurance provider. These programs enable nursing home administrators to bill the federal government for therapy sessions, medications and other required health care services so they can be reimbursed. Unfortunately, this system is often abused by nursing homes lacking in funding or merely seeking an increase in profits.

A nursing home in Mission Viejo was recently busted for fraudulently billing Medicare for therapy sessions at its facility that either never took place or were medically unnecessary. The federal government takes these cases very seriously, and prosecuted the nursing home for its fraud, resulting in a $48 million settlement. The operator, Ensign Group, owns nursing homes along the West Coast and as far East as Iowa, as well as providing in-home care to seniors.

Between 1999 and 2011, Ensign systematically inflated the prices of its services when billing Medicare, even submitting claims for therapy sessions that were never provided. This occurred at at least six facilities, which billed for unnecessary speech, occupational, and physical therapy services, and even incentivized employees to increase the amount of sessions regardless of patient need. The six facilities are: Victoria Care Center in Ventura, Southland in Norwalk, Sea Cliff Healthcare Center in Huntington Beach, Orchard Post Acture Care in Whittier, Panorama Gardens in Panorama City, and Atlantic Memorial Healthcare Center in Long Beach.

What to do if You Suspect Fraud

This lawsuit was triggered by two whistleblowers, former employees of Ensign, who filed a complaint with the U.S. attorney’s office about the fraud. Medicare and Medicaid payments to nursing homes are meant to provide residents with a safe and sanitary living environment, medical care, daily assistance, and nutritious meals. If a nursing home bills for any of these services but does not adequately provide them, fraud is being committed.

Under qui tam law, employees who suspect fraud are able to file claims with the federal government, which will then launch a thorough investigation. If there is indeed fraud being committed, a lawsuit will ensue and the whistleblowers are entitled to receive a portion of the verdict or settlement (often between 15 and 30%). It is not yet clear how much the Ensign employees will receive, although it will be anywhere between $7.2 and $14.4 million.

Fraud can be committed in a variety of situations, such as billing Medicare for a brand-name drug when really a generic is administered, or using cheap medical equipment while billing for more expensive devices. Certain signs can indicate fraud is being committed in a nursing home even if you do not know for sure. These signs include residents that are dehydrated or malnourished, unsanitary living conditions, broken-down medical equipment, and insufficient heat or air conditioning. It is important for nursing home employees and families of residents to know and be able to recognize signs of fraud, as it often leads to dangerous neglect and abuse of residents.

In 2012, the owner of three Southern nursing homes was convicted of Medicare and Medicaid fraud after it was discovered residents were living in horrible conditions. The facilities were infested with rodents, mold, garbage, and patients suffered from severe malnutrition. At the same time, the owner was billing the federal government for tens of millions of dollars, claiming it was for resident care when in reality he was pocketing the money, buying luxury homes, cars and vacations. Had employees or families of the residents been more attune to the signs of fraud, investigations would have launched much sooner.

Nursing home negligence lawyers at Pintas & Mullins understand how complex and worrisome having a loved one in a nursing home can be. We have been working with families of nursing home residents for over two decades, and have our own team of investigators and medical experts who can help determine if fraud, abuse or neglect is occurring at a facility. If you have any questions regarding nursing home negligence or Medicare fraud, contact our firm today for a free legal consultation.