Extendicare Nursing Home Settlement Results in $38M Payment for Poor Care

The federal government and eight states have reached a record-setting $38 million settlement with Extendicare Health Services Inc., and its subsidiary Progressive Step Corporation, resolving allegations that the company billed government medical assistance programs for materially substandard and inadequate nursing home care provided to residents. 

The Department of Justice (DOJ) announced the Extendicare nursing home settlement on Friday, indicating that the nationwide chain has agreed to pay $38 million to resolve claims.

According to allegations, Extendicare billed Medicare and Medicaid for medically unreasonable and unnecessary rehabilitation therapy services between 2007 and 2013, as well as providing poor care, which led to multiple reports of nursing home neglect, including falls, dehydration reports, malnutrition, and failure to provide adequate catheter care to residents.

Following a nearly seven year investigation, the Unites States federal government and state agencies were able to settle with the Delaware based nursing home giant, which operates 146 facilities in 11 states.

Extendicare Nursing Home Problems

The investigation stemmed from two whistleblower lawsuits in Pennsylvania and Ohio, which claimed that Extendicare nursing homes provided substandard care and unnecessary rehabilitation, prompting the DOJ and the Department of Health and Human Services to investigate, revealing problems with care in at least 33 nursing homes in eight states.

The facilities investigated were in Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington, and Wisconsin. The Justice Department and HHS found that the facilities employed few too many skilled nurses to accommodate the number of high-need patients and that there were far too many reports of injuries from falls, malnutrition, dehydration, and infections in which some cases required amputations.

The investigation also revealed the facilities failed to provide adequate catheter care to its residents and also failed to follow the appropriate protocols to prevent pressure ulcers and falls.

After recognizing the establishments failure to maintain a decent standard of care for patients, further review indicated the Extendicare nursing homes were referring Medicare Part A beneficiaries to its subsidiary Progressive Step Corporation (ProStep) to receive medically unnecessary rehabilitation therapy, resulting in inflated billing costs.

Documents filed by the DOJ claimed that some of the patient care services and nursing services were so deficient that they were effectively worthless.

Nursing Home Whistleblower Settlement

Of the $38 million settlement, $28 million will go to the federal government to cover claims that Extendicare billed Medicare and Medicaid for substandard services from 2007 to 2013. An additional $5.7 million will be disbursed among eight state Medicaid programs.

The settlement comes as a result of two “whistleblower” lawsuits that were filed under the False Claims Act, which will result in a portion of the recovery being paid to the individuals who brought the complaints. In one case, Tracey Lovvron will receive a little more than $1.8 million after Extendicare terminated her employment, in violation of “whistleblower protection” provisions set forth in the federal and Wisconsin FCAs. In the second case, Donald Gallick will receive nearly $260,000 as his share of the recovery in the Ohio worthless services case.

In addition to the settlement, Extendicare will be required to enter a five year chain-wide Corporate Integrity Agreement that will maintain an internal audit program monitoring quality-of-care and procedures. The agreement also entails that Extendicare create comprehensive compliance programs with systems to address the quality of resident care as well as corporate-level committees to assess staffing systems.

Extendicare has been under constant fire for the last decade or more, with several class action lawsuits filed against them on behalf of residents, claiming that the facilities admitting residents that they were not properly equipped to treat.