Long Term Care & Senior Living Blog

The Department of Justice (DOJ) announced a settlement for claims of substandard nursing care and medically unnecessary rehabilitation therapy wherein Extendicare will pay $38 million to settle False Claims Act allegations. Rehabilitation services have been a frequent target for DOJ investigation and settlement of alleged overpayments. Once again, DOJ brings closure to an investigation of an initiative from the Health Care Fraud Prevention and Enforcement Action Team (HEAT). In addition to HEAT, this settlement arose from an investigation related to the Justice Department’s Elder Justice initiative, which coordinates the Office of Inspector General (OIG) efforts to combat elder abuse, neglect and financial exploitation.

Two recently announced settlements with Washington State and the Federal government show two potential overpayment issues for providers.

As a result of the substantial backlog of pending appeals for denied inpatient claims, Centers for Medicare & Medicaid Services (CMS) issued an offer to settle these denied claims in exchange for the hospitals withdrawal of pending appeals. Acute Care Hospitals and Critical Access Hospitals have until October 31, 2014 to make a settlement request. The settlement offer provides for hospitals to enter an administrative agreement to receive timely partial payment (68%) of the net allowable amount in exchange for withdrawal of their pending appeals.

The Justice Department is committed to combat fraud and abuse in federal healthcare programs. The most recent complaint filed by the DOJ is against Midwest Neurosurgeons LLC and its owner, Dr. Sanjay Fonn, MD, along with DS Medical LLC and its owner, Deborah Seeger. The defendants allegedly violated the Anti-Kickback Statute and False Claims Act by conspiring to solicit and receive commissions from medical device manufacturers related to the implant of spinal implants and supplies used for spinal fusion surgeries.

False Claims Act (FCA) allegations are serious business. Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. Omnicare learned the hard way just how serious FCA actions can be when a whistleblower made allegations against it.