$38M Settlement Reached With Large Nursing Home Chain Under False Claims Act

162017_132140396847214_292624_nOn October 10, 2014, the U.S. Department of Justice announced that the large, national nursing home chain, Extendicare Health Services Inc. (“Extendicare”) and its subsidiary Progressive Step Corporation (“ProStep”), have agreed to pay $38 million to the United States and eight U.S. states to resolve allegations that Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services.

Under the terms of the settlement, the federal government will receive $32.3 million and the Medicaid programs of eight states will receive $5.7 million. The eight states involved with the settlement are Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington, and Wisconsin.

The settlement resolves civil claims that Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services to its Medicare Part A beneficiaries, particularly during the patients’ assessment reference periods, so that it could bill Medicare for those patients at the highest per diem rate possible in 33 of Extendicare’s skilled nursing homes, between 2007 and 2013.

In addition to the amounts paid in settlement, Extendicare also agreed to a five-year, chain-wide Corporate Integrity Agreement under which Extendicare must have a comprehensive compliance program with systems to address the quality of resident care. Extendicare’s compliance program must include, among other things, corporate-level committees to address compliance and quality, including a committee to assess staffing, and an internal audit program to assess the quality of care provided to its residents. Extendicare must retain an independent monitor, selected by the Office of Inspector General (“OIG”), who will regularly visit Extendicare’s facilities and report to the OIG. In addition, an independent review organization will perform annual reviews of Extendicare’s claims to Medicare.

Two separate whistleblowers who brought claims against Extendicare on behalf of the United States under the federal False Claims Act will receive more than $1.8 million and more than $250,000, respectively. The higher payout involves allegations of upcoding and the lower payout involves claims that Extendicare provided substandard nursing services that were effectively worthless.


Extendicare operates 251 senior care centers and has the capacity for approximately 27,600 residents in North America. Extendicare Health Services, Inc., which is an indirect wholly owned subsidiary of Extendicare, operates 156 senior care facilities in the United States with approximately 15,000 beds. Extendicare also offers nursing care, assisted living and related medical specialty services, such as subacute care and rehabilitative therapy on an inpatient and outpatient basis, and it provides purchasing, management, and consulting services to third-party providers.


If you or a loved one suffered injuries (or worse) while a resident in a nursing home in the United States, you should promptly consult with a local nursing home claim attorney in your state who may investigate your claim against a nursing home for you and represent you in a nursing home negligence, nursing home neglect, and/or nursing home abuse case, if appropriate.

Click here to visit our website or telephone us in the United States toll-free at 800-295-3959 to be connected with nursing home claim lawyers in your state who my assist you.

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This entry was posted on Thursday, October 16th, 2014 at 6:01 am. Both comments and pings are currently closed.


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