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Nursing Home Operator Will Pay $48 Million to Settle False Claims Act Allegations in Qui Tam Cases Filed by Whistleblowers

California-based The Ensign Group, Inc. has agreed to pay $48 million to settle allegations that it violated the False Claims Act.  The allegations were made in two separate qui tam lawsuits originally brought by whistleblowers in the United States District Court for the Central District of California.

The two whistle blowers, Gloria Patterson and Carol Sanchez, are both former therapists for Ensign.  The whistleblowers filed separate whistleblower cases against Ensign under the qui tam provisions of the False Claims Act.  Ensign is based in Mission Viejo, California and operates nursing homes throughout the western part of the United States.

The whistleblowers alleged that Ensign, a skilled nursing provider that operates multiple nursing homes, violated the False Claims Act by submitting false claims to Medicare for medically unnecessary therapy services.  Specifically, the whistleblowers alleged that six Ensign facilities located in California – Long Beach, Panorama City, Whittier, Huntington Beach, Norwalk, and Ventura – knowingly submitted false claims to Medicare for physical therapy, occupational therapy, and speech therapy that was either medically unnecessary, or was not provided.

The whistleblowers alleged that Ensign wrongfully incentivized therapists to perform excessive amounts of therapy in order to meet planned targets for Medicare revenue.  According to the government, in some cases, Ensign submitted false claims to Medicare for therapy services that were never provided.  The government also alleged that Ensign kept patients in its facilities for longer periods of time than was medically necessary given the patients’ conditions.

According to the whistle blowers, the Ensign facilities submitted the false claims from 1999 to 2011.

Ensign has agreed to pay $48 million to settle the qui tam lawsuits.  Pursuant to the qui tam provisions of the federal False Claim Act, the whistleblowers will be entitled to share in a percentage of the settlement proceeds.   Whistleblower awards vary depending on the type of fraud,  the amount of assistance the whistleblower has done to assist the government in recovering the money, and whether the government intervened in the qui tam lawsuit before it was resolved.

The six Ensign facilities covered by the settlement are: Atlantic Memorial Healthcare Center, Panorama Gardens, The Orchard Post-Acute Care, Sea Cliff Healthcare Center, Southland, and Victoria Care Center.

For more information on qui tam and whistleblower cases and the False Claims Act click here.

Business Litigation | False Claims Act & Whistle-blower Cases