Consumer Fraud

Whistleblowers’ Medicare-fraud lawsuit recovers $48 million from California nursing home group

A California-based nursing home company that operates in several western states has agreed to pay $48 million to resolve whistleblower allegations that it performed medically unnecessary rehabilitation services on its patients and billed Medicare for the procedures, the U.S. Justice Department said. The settlement is one of the largest Medicare fraud cases against a nursing home in U.S. history.

osha whistle Whistleblowers Medicare fraud lawsuit recovers $48 million from California nursing home groupAccording to the Justice Department, six skilled nursing facilities belonging to Mission Viejo-based Ensign Group Inc. submitted false claims to Medicare for the unneeded treatments. The fraudulent practices were brought to the attention of U.S. regulators by two former Ensign Group therapists, who filed lawsuits in 2006 against the company under the qui tam provision of the False Claims Act, which allows private individuals to sue on behalf of the U.S. government when they have evidence of fraud and other wrongdoing against Medicare, Medicaid, and other taxpayer-funded programs and agencies.

In exchange, False Claims Act whistleblowers receive up to 30 percent of any recovery their case brings.

The Justice Department reported that the six Ensign facilities submitted false claims to Medicare for more than a decade starting around January 1, 1999. The nursing facilities allegedly provided physical, occupational, and speech therapy services to Medicare beneficiaries that were not medically necessary, “solely to increase its reimbursement from Medicare.”

The government also claimed that Ensign created a corporate culture that improperly incentivized therapists and other staff to increase the amount of patient therapy strictly to meet planned targets for Medicare revenue without regard to patients’ actual therapy needs. Ensign then billed Medicare at the highest reimbursement levels.

Additionally, the government alleges Ensign billed for inflated amounts of therapy it never provided and that certain patients were kept in company facilities for longer periods of time than were necessary.

“The case against The Ensign Group involves a company that regularly bilked Medicare by submitting inflated bills that, in some cases, sought money for services that simply were never provided to patients,” said U.S. Attorney for the Central District of California André Birotte Jr.  “This settlement … demonstrates our commitment to protecting taxpayers who fund important programs that benefit millions of Americans, but don’t want to see their hard-earned money wasted on fraud or abuse.”


U.S Department of Justice