October 10, 2014 — The Justice Department has announced that a major chain of nursing homes must pay $38 million to resolve a lawsuit alleging that they provided worthless care, jeopardized the safety of elders, and overcharged Medicare and Medicaid for unnecessary rehabilitation.
Extendicare Health Services, Inc. was accused of numerous abuses, such as failing to provide enough skilled nurses, failing to provide adequate catheter care, and failing to take appropriate steps to prevent ulcers (bed sores) and falls.
Extendicare was also accused of subjecting patients to unnecessary rehabilitation services so they could charge Medicare and Medicaid the maximum possible rate per day, putting company profits above the needs of their patients.
Prosecutors with the Justice Department stated:
“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.”
Extendicare operates about 150 nursing homes in 11 states. Only 33 nursing homes in eight states were included in the allegations of abuse, including Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.
The lawsuit was filed by two private citizens under the False Claims Act, which allows individuals to bring lawsuit against corporations on behalf of the United States of America and receive a portion of the damages.
One of the plaintiffs, Tracy Lovvorn, received $1.8 million for showing that Extendicare “upcoded” patients to receive higher reimbursements. Another plaintiff, Donald Gallick, will receive over $250,000 for showing that Extendicare provided worthless service to patients in Ohio.
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