State Reaches Nursing Home Settlement

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The state's Medicaid program will receive more than $700,000 from a settlement with a nursing home company. The Indiana Attorney General's office says Wisconsin-based Extendicare Health Services Inc. has agreed to pay to resolve allegations of billing Medicaid for "substandard" services. October 10, 2014

News Release

INDIANAPOLIS, Ind. - The State of Indiana's Medicaid program will receive more than $708,000 from Extendicare Health Services Inc. in a settlement to resolve allegations that the nursing home company wrongly billed Medicaid for substandard nursing services that were so deficient they were effectively worthless, Indiana Attorney General Greg Zoeller announced today.

As a result of a joint investigation by eight states and the federal government, Extendicare Health Services and its subsidiary, Progressive Step Corporation or ProStep reached an agreement to settle allegations the companies wrongfully billed Medicare and Medicaid for substandard services provided to residents in their facilities. Extendicare and ProStep will pay $28 million to resolve the substandard services allegations; and of that, the Indiana Medicaid program will recover $708,748.28 for ineligible reimbursement overpayments the companies had received.

"The investigation found that the trust of our most vulnerable senior citizens who depend on these facilities was violated when the company failed to provide substantial services or billed for substandard services. It won't be tolerated, and this settlement agreement will recover the Medicaid reimbursement payments the company wrongly received and also compel changes by the company so that better protections are in place," Zoeller said. The Attorney General's Medicaid Fraud Control Unit (MFCU) worked on the multistate investigation and settlement negotiations.

The settlement resolves allegations that between 2007 and 2013, Extendicare billed the state-and-federal Medicaid program and federal Medicare program for materially substandard skilled nursing services, and failed to provide care to its residents that met federal and state standards of care and regulatory requirements. The states and the federal government alleged that Extendicare failed to have a sufficient number of skilled nurses to adequately care for its skilled nursing residents; failed to provide adequate catheter care to some of the residents; and failed to follow the appropriate protocols to prevent pressure ulcers or falls.

Ontario-based Extendicare Inc. has corporate headquarters in Milwaukee and operates 146 skilled nursing facilities in 11 states, including Indiana.

In the settlement, Extendicare and ProStep do not admit wrongdoing. The defendants were required to agree to a five-year, chain-wide Corporate Integrity Agreement to ensure that residents are provided with the quality of care to which they are entitled. The agreement applies to all 146 Extendicare locations, under which Extendicare must have a comprehensive compliance program to address staffing and quality of care provided to its residents. Extendicare must retain an independent monitor who will regularly visit Extendicare’s facilities and report to the Health and Human Services Office of Inspector General (HHS-OIG).

The U.S. Department of Justice described the Extendicare and ProStep national settlement as the largest failure-of-care settlement with a chain-wide skilled nursing facility in the Department’s history. In addition to the $28 million that reimburses the Medicaid program, Extendicare also must pay another $10 million to resolve separate federal allegations of illegal upcoding, or overbilling, of claims to the federal Medicare program.

Other states in addition to Indiana participating in the Medicaid settlement with Extendicare and ProStep are Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington, and Wisconsin.

Zoeller thanked two members of the Indiana Attorney General’s Medicaid Fraud Control Unit who worked on the complex multistate investigation and served on the settlement-negotiation team: Deputy Attorney General Jessica Harlan-York, and Deputy Attorney General Kristen Kemp.

Zoeller urges Hoosiers who have family members in any nursing home facility regardless of its ownership to be aware of any changes in the resident’s condition, appearance or demeanor that could be signs of substandard care, neglect, abuse, dehydration or malnourishment. Complaints of abuse, neglect or financial fraud against patients in nursing home facilities can be reported to the Medicaid Fraud Control Unit by calling 800-382-1039. More information about warning signs to look for in nursing home care can be found on the Attorney General’s web site at this link: http://www.in.gov/attorneygeneral/2360.htm

Source: The Office of the Indiana Attorney General