Fraudulent Claims Plus Poor Patient Care Equals $53.6 Million Settlement

Genesis Healthcare Inc., one of the nation’s largest skilled nursing and rehabilitation therapy providers, recently settled 6 lawsuits with the federal government for a total of $53.6 million. These lawsuits alleged a combination of fraudulent Medicare and Medicaid claims as well as “grossly substandard” patient care. Serving 45 states and the District of Columbia, Genesis has prior experience with government settlements. In 2016, Genesis settled another batch of allegations for an estimated $52.7 million. This 2017 settlement stems from issues arising within subsidiaries Genesis has acquired over the past few years. Such issues include improperly billing the government for hospital services, inadequately staffing facilities, and violating Medicare rules related to physical therapy.

Sundance Rehabilitation Corporation, a Genesis subsidiary, was alleged in a 2012 suit by a Georgia whistleblower to have billed Medicare for millions of dollars in unnecessary therapy services. The investigation was conducted by the U.S. Attorney’s Office in Atlanta, the FBI, the U.S. Department of Health and Human Services, and the Defense Criminal Investigative Service. Ultimately, the government alleged that Sundance took part in a scheme over nearly 6 years in which management in their Georgia offices constantly pressured their therapists to request frequent physical, occupational, and speech therapies for nearly every patient seen, regardless of medical necessity.

Skilled Healthcare Group, Inc., another Genesis subsidiary, was alleged to have billed Medicare for hospice services for patients who were not terminally ill, and billed inappropriately for evaluation management services. The government alleges that this took part in their Las Vegas facilities from roughly 2010-2013.

Though further specifics of the overall allegations against Genesis are unclear at this time, the government investigation also alleged before settlement that in some Genesis-owned entities, the patient care was so grossly substandard as not to be eligible at all for Medicare or Medicaid billing.

Genesis ultimately foots the $53.6 million bill for this settlement as the parent company of the alleged violators, but it is unclear what, if any, knowledge of these alleged occurrences Genesis actually had. As some of the subsidiaries having alleged violations were recent acquisitions, it is quite possible Genesis had no prior knowledge of the problems before purchasing. As one spokesperson for Genesis stated after the settlement, Genesis operates in a highly regulated industry and is pleased to settle their legal matters. However, as this settlement makes clear, being unaware is no defense to fraud and abuse against the government.