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Genesis Healthcare to pay nearly $54 million to resolve allegations of unnecessary hospice care, rehabilitation therapy

Settlement resolves several lawsuits stating company billed government payers, including Medicare and TRICARE, fraudulently, DOJ says.

Beth Jones Sanborn, Managing Editor

Pennsylvania-based skilled nursing and rehabilitation therapy provider Genesis Healthcare will pay $53.6 million to settle six federal lawsuits and four sets of allegations that companies  Genesis acquired violated the False Claims Act by submitting claims to government payers for unnecessary or "grossly substandard" services, the Department of Justice announced.

The company is headquartered in Kennett Square, Pennsylvania, and through subsidiaries owns and operates skilled nursing facilities, assisted living facilities and rehabilitation therapy.

First, the government alleged that from April 1, 2010 through March 31, 2013 Skilled Healthcare Group, and subsidiaries Skilled Healthcare and Creekside Hospice II, knowingly submitted false claims to Medicare by billing for hospice services for patients who weren't actually terminally ill, as well as billing inappropriately for certain physician evaluation management services, the DOJ said.

[Also: Running list of notable 2017 healthcare frauds]

Also, from Jan. 1, 2005 through Dec. 31, 2013, SKG and subsidiaries Skilled Healthcare and Hallmark Rehabilitation allegedly submitted or caused to be submitted fraudulent claims to Medicare, TRICARE, and Medicaid by providing longer-than-needed therapy to certain patients and billing for more therapy time than the patients actually received. Additionally, those facilities allegedly assigned patients a higher Resource Utilization Group level than necessary, the DOJ said.

Medicare reimburses based on a patient's RUG level, a figure that is supposed to be calculated according to the amount of skilled therapy required the patient needs.

Other allegations state that from Jan. 1, 2008, through Sept. 27, 2013, Sun Healthcare Group, SunDance Rehabilitation Agency, and SunDance Rehabilitation Corp. also submitted false claims to Medicare Part B by billing for unnecessary or "unskilled" outpatient therapy services provided in the Georgia, according to the DOJ.

[Also: Texas provider Union Treatment Center to pay $3 million over fraud scheme, banned from all federal healthcare programs]

Finally, the government alleged that between Sept. 1, 2003 and Jan. 3, 2010, Skilled Healthcare submitted Medicare and Medi-Cal claims services at certain facilities that were "grossly substandard" and/or worthless as certain nursing home requirements that allow government reimbursement had been violated, and sufficient nursing staff had not been provided, the DOJ said.

Genesis bought SKG and its subsidiaries after the conduct at issue in this settlement. However, Sun Healthcare Group, SunDance Rehabilitation Agency and SunDance Rehabilitation Corp. were acquired by Genesis in December 2012, during some of the alleged conduct.

The settlement resolves allegations brought in qui tam, or whistleblower lawsuits filed by seven former employees of the companies. As allowed by law, they are allowed to share in the recovery, and will receive a total of $9.67 million.

Twitter: @BethJSanborn

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