Genesis Healthcare Settlement Another Example of Government’s Anti-Fraud Campaign

Whatever else is taking place in the nation’s capital these days, one thing is for certain, there is no letup in the government’s crackdown on healthcare fraud. This is made clear by the continued announcements of multimillion-dollar settlements coming from various fraud-fighting agencies.

One of the more recent settlements involves Genesis Healthcare, Inc., a Kennett Square, Pa. provider of short-term post-acute, rehabilitation, skilled nursing and long-term care services.

Earlier this month, the U.S. Department of Justice announced that Genesis will pay the federal government $53.6 million, including interest, to settle six federal lawsuits and investigations regarding the submission of false claims for medically unnecessary therapy and hospital services, as well as “grossly substandard” nursing home care.

The settlement resolved four sets of allegations:

The first involved Skilled Healthcare Group, Inc. (SKG) and its subsidiaries. The government alleged that from April 1, 2010 through March 31, 2013, SKG and its subsidiaries knowingly submitted, or caused to be submitted, false claims to Medicare for services performed at its hospice facility in Las Vegas.

The second involved allegations that from Jan. 1, 2005 through Dec. 31, 2013, SKG and its subsidiaries knowingly submitted, or caused to be submitted, false claims to Medicare, TRICARE, and Medicaid by providing therapy to certain patients longer than medically necessary, and/or billing for more therapy minutes than the patients received. The settlement also resolved allegations that those companies fraudulently assigned patients a higher Resource Utilization Group (RUG) level than necessary. Medicare reimburses skilled nursing facilities based on a patient’s RUG level, which is supposed to be determined by the amount of skilled therapy the patient requires.

The third involved allegations that from Jan. 1, 2008, through Sept. 27, 2013, Sun Healthcare Group, Inc., SunDance Rehabilitation Agency, Inc., and SunDance Rehabilitation Corp. knowingly submitted, or caused the submission of, false claims to Medicare Part B by billing for outpatient therapy services provided in Georgia that were not medically necessary or unskilled in nature.

The fourth involved allegations that between Sept. 1, 2003, and Jan. 3, 2010, Skilled LLC submitted false claims to the Medicare and Medi-Cal programs at some of its nursing homes for services that were grossly substandard and/or worthless and were therefore ineligible for payment.

The settlement resolves allegations brought in lawsuits filed under whistleblower provisions of the False Claims Act by seven former employees of companies acquired by Genesis. The act allows private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. In this case, the whistleblowers will receive a combined $9.67 million.

Speaking at the American Bar Association’s Institute on Healthcare Fraud in Fort Lauderdale last month, Acting Assistant Attorney General Kenneth Blanco for the Criminal Division of the Department of Justice, reiterated the government’s position that healthcare fraud will continue to be a priority.

He noted that between the beginning of 2016 and February of 2017, the Medicare Strike Force program, the Health Care Fraud Unit, and partner U.S. Attorney’s Offices, had charged 482 individuals with a total loss amount of nearly $2.8 billion.

He pointed out that investigators are becoming increasingly adept at using “highly advanced data analysis to identify aberrant billing levels” to target suspicious billing patterns and emerging schemes. In fact, they are now able to obtain billing data from the Centers for Medicare and Medicaid in close to real time. This is critical because it allows investigators to stop healthcare fraud earlier on, before millions of dollars are lost.

“Access to CMS billing data in close to real time permits us to remain a step ahead. We have the opportunity to halt schemes as they develop,” Blanco told his audience.

Healthcare providers should expect continued scrutiny. Having a compliance program in place is critical to ensuring that fraud and abuse is not taking place. Ignorance is not a defense in today’s healthcare environment. The Health Law Offices of Anthony C. Vitale can help you before you become the focus of an investigation and will aggressively defend you should you become the target of one. Give us a call at 305-358-4500 or send an email to and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale