One of the nation’s largest nursing home chains has agreed to pay $38 million to settle allegations that it improperly billed federal health programs for the poor and aging and provided unnecessary care, as well as “disturbing” substandard care.
In announcing what was said to be the largest quality-of-care settlement involving nursing facilities in the United States, Justice Department officials said Friday that Extendicare Health Services and its subsidiary, Progressive Step Corp., known as ProStep, had employed fewer skilled nurses than necessary and had failed to properly train and supervise the staff.
“The investigation identified many disturbing examples of falls, fractures and head injuries to residents, often unnoticed by the staff for hours, as well as malnutrition, dehydration, pressure ulcers and infections,” acting Assistant Attorney General Joyce Branda said on a conference call.
In addition, the investigation found that Extendicare facilities admitted very sick residents without being able to provide them with adequate care, leading to short-term residents not getting proper care and long-term residents being ignored.
The investigation focused on a group of 33 Extendicare facilities from 2007 to 2013. The settlement covers facilities in eight states: Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.
Extendicare will owe the federal government and the eight states $28 million to settle the allegations of inadequate care, according to the settlement, and $10 million to resolve allegations of filing false claims to Medicare.
“Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services, particularly during the patients’ assessment reference periods, so Extendicare could bill Medicare for those patients at the highest . . . levels,” according to the settlement.
Extendicare denied in a news statement that it had engaged in any illegal conduct and said it had agreed to the terms of the settlement without an admission of wrongdoing.
“We are pleased to finally put this matter behind us,” Tim Lukenda, the president and CEO of Extendicare, said in the statement.
Acting Associate Attorney General Stuart Delery said it was “critically important that we confront nursing home operators who put their own economic gain ahead of the needs of their residents.”
Although four facilities in Kentucky were part of the settlement, the company has since left the state because of increased litigation against it, according to an article in McClatchy’s Lexington Herald-Leader in 2012.
“Operators who bill our vital state and federal programs for services so deficient that they are effectively worthless will be pursued for false claims,” Kentucky Attorney General Jack Conway said Friday in a statement.
All 20 Extendicare facilities in Pennsylvania are included in that part of the settlement. The state’s Medicaid program will receive $2.2 million and the state itself will keep about $1 million from the settlement, according to the Pennsylvania Attorney General’s Office.
“It is critical to the integrity of a system that benefits millions of Americans that we do as much as possible to hold accountable those who commit fraudulent acts,” Zane David Memeger, the U.S. attorney for the Eastern District of Pennsylvania, said in a statement.
Extendicare and ProStep are also required to enter into a five-year Corporate Integrity Agreement that includes a rigorous compliance program intended to protect the quality of resident care. The agreement is chainwide, meaning it comprises all 146 of the company’s nursing home facilities in 11 states, whether or not they’re part of the settlement.
The Corporate Integrity Agreement “focuses on remedying the wrongs we uncovered during the investigation,” Branda said.
Lukenda said the company was well positioned to fulfill the agreement’s compliance-related requirements.