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$53.6 Million Genesis Healthcare Settlement Reached in False Claims Act Lawsuits


Doctor holding older woman's hand with Genesis logoGenesis Healthcare Inc. agreed to pay the United States government $53.6 million plus interest to resolve six federal lawsuits alleging Genesis subsidiaries submitted false claims to government health care programs for medically unnecessary therapy and hospice services, and grossly substandard nursing care. The allegations were initially brought to the government’s attention by several whistleblowers, all of whom worked at companies or facilities acquired by Genesis.

Headquartered in Kennett Square, Pennsylvania, Genesis Healthcare owns and operates through its subsidiaries a number of skilled nursing facilities, senior living facilities, and a rehabilitation therapy business.

The Genesis Healthcare settlement agreement resolves four sets of allegations against the company and its subsidiaries:

  1. Between April 1, 2010, and March 31, 2013, Skilled Healthcare Group Inc. (SKG) and its subsidiaries, Skilled Healthcare LLC (Skilled LLC) and Creekside Hospice II LLC, allegedly submitted or caused the submission of false claims to Medicare for services performed at a Creekside Hospice facility in Las Vegas, Nevada. The alleged scheme involved billing for hospice services for patients who weren’t terminally ill, thus ineligible to receive Medicare hospice benefits, and billing inappropriately for various physician evaluation management services.
  1. From Jan. 1, 2005 to Dec. 31, 2013, SKG and its subsidiaries, Skilled LLC and Hallmark Rehabilitation GP LLC, allegedly submitted or caused the submission of false claims to Medicare, TRICARE, and Medicaid by providing therapy to certain patients for longer periods than medically necessary. During this time, SKG, Skilled LLC, and Hallmark allegedly assigned patients a higher Resource Utilization Group (RUG) level than necessary. Medicare reimburses skilled nursing facilities based on a patient’s RUG level, which is supposed to be determined by how much skilled therapy a patient requires.
  1. From January 1, 2008, through Sept. 27, 2013, Sun Healthcare Group Inc., SunDance Rehabilitation Agency Inc., and SunDance Rehabilitation Corporation allegedly submitted or caused the submission of false claims to Medicare Part B by billing for outpatient therapy services in the State of Georgia that were either medically unnecessary or unskilled in nature, according to the Justice Department.
  1. Between Sept. 1, 2003, and Jan. 3, 2010, Skilled LLC allegedly submitted false claims to Medicare and Medi-Cal (State of California medical assistance program) at a number of its skilled nursing facilities for services that were grossly substandard, thus ineligible for reimbursement. According to the allegations, Skilled LLC failed to provide sufficient nurse staffing at its facilities and violated requirements that nursing homes are required to meet in order to participate in and receive reimbursements from government healthcare programs.

Genesis Healthcare acquired SKG and its subsidiaries after the conduct alleged in this settlement had taken place. Sun Healthcare Group Inc., SunDance Rehabilitation Agency Inc., and SunDance Rehabilitation Corp. were acquired by Genesis in December 2012.

The Genesis Healthcare settlement agreement resolves allegations initially brought in lawsuits filed under qui tam provisions of the False Claims Act (FCA). The FCA allows for private parties to sue on the government’s behalf over the submission of false claims for government funds. The government may decide to intervene in the lawsuit. If the lawsuit leads to successful enforcement action, the whistleblower, or relator, shares in a percentage of funds returned to the government.

The relators in the case against Genesis Healthcare include Joanne Cretney-Tsosie, Jennifer Deaton, Kimberley Green, Camaren Hampton, Teresa McAree, Terri West, and Brian Wilson, all of whom worked at companies that were acquired by Genesis. The whistleblowers will share a reward of $9.67 million for bringing the allegations to the government’s attention. As of today, it is unclear how the sum will be divided amongst the seven whistleblowers.

The claims resolved by today’s Genesis Healthcare settlement are allegations only; there has been no determination of liability.

The cases are docketed as the United States, ex rel. Cretney-Tsosie v. Creekside Hospice II, LLC, Case No. 2:13-cv-167-HDM (D. Nev.); United States ex rel. McAree v. SunDance Rehabilitation Corp., Case No. 1:12-CV-4244 (N.D. Ga.); United States, ex rel. West v. Skilled Healthcare Group Inc., et. al., Case No. 11-02658-ED (N.D. Cal.); United States ex rel. Deaton v. Skilled Healthcare Group, Inc., et al., Case No. 4:14-cv-00219 (W.D. Mo.); and United States ex rel. Wilson v. Skilled Healthcare Group, Inc., et al., Case No. 14-cv-860 (W.D. Mo.).

Skilled Nursing Home Fraud Whistleblower

The allegations resolved by the Genesis Healthcare settlement are nothing new. According to a Department of Health and Human Services report, one-quarter of claims submitted by skilled nursing facilities to Medicare in a given year were made in error, resulting in $1.5 billion in inappropriate payments.

Whistleblowers are essential in the fight against skilled nursing home fraud. If you have firsthand knowledge of skilled nursing home fraud and don’t know what your options are, consider speaking with an experienced whistleblower attorney to help you decide on the best course of action.



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