On June 16, 2017, the Department of Justice announced that Genesis Healthcare paid $53.6 million to resolve six False Claims Act whistleblower lawsuits filed by seven of Genesis’ former employees.  The lawsuits alleged that hospice, rehabilitation, and skilled nursing companies and facilities acquired by Genesis violated the False Claims Act.

The relators in the case alleged that Genesis’ subsidiaries engaged in various fraudulent Medicare and Medicaid billing practices before, and in some cases after, Genesis’ acquisition of the companies.  Specifically, the settlement resolves four sets of allegations:

• First, the settlement resolves allegations that Skilled Healthcare Group Inc. (SKG) and its subsidiaries at the Creekside Hospice facility in Las Vegas, Nevada, submitted false claims to Medicare by: (1) billing for hospice services for patients who were not terminally ill and so were not eligible for the Medicare hospice benefit; and (2) billing inappropriately for certain physician evaluation and management services.
• Second, the settlement resolves allegations that SKG and its subsidiaries submitted false claims to governmental payors at certain facilities by providing therapy to patients longer than medically necessary, billing for more therapy than patients received, and assigning certain patients a higher Resource Utilization Group level than necessary.
• Third, the settlement resolves allegations that certain subsidiaries of Genesis submitted false claims to Medicare Part B by billing for outpatient therapy services that were not medically necessary or unskilled in nature.
• Fourth, the settlement resolves allegations that a skilled nursing subsidiary of Genesis submitted false claims to governmental payors at certain nursing homes for services that were grossly substandard and/or worthless and therefore ineligible for payment.

Notably, the settlement, which was based on Genesis’ inability to pay, does not require Genesis to enter into a Corporate Integrity Agreement with HHS OIG.  Genesis did not admit to liability as part of the settlement.  The relators will receive a collective $9.67 million as the relators’ share of the settlement.

The DOJ press release is available here.