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Genesis HealthCare To Pay $54 Million To Settle Qui Tam Lawsuits that Allege that the Company’s Subsidiaries Previously Overbilled the Government for Hospice-Related Services

Nursing home operator Genesis HealthCare (“Genesis”) has agreed to resolve allegations that the company’s subsidiaries previously submitted false claims to the government for payment for unnecessary hospice services that were provided to Medicaid and Medicare beneficiaries. The recent settlement is the result of allegations that stemmed from five separate qui tam, or whistleblower, lawsuits that were filed by a total of seven relators. Genesis has agreed to settle the lawsuits for $54 million.

Headquartered in Kennett Square, Pennsylvania, Genesis Healthcare was established in 1985, and currently runs over 500 skilled nursing facilities and assisted living centers across 34 states. Genesis acquired two of the subsidiaries in question, Skilled Healthcare Group Inc. (SKG) and Sun Healthcare Group, Inc. (Sun) following the companies’ alleged misconduct. Genesis’s acquisition of SKG positioned the company as one of the most dominant post-acute care operators in the country.

Within the five individually filed whistleblower lawsuits, the relators allege that SKG and Sun’s nursing home facilities regularly billed Medicare and Medicaid for hospice services that were provided to beneficiaries who were not qualified to receive them. The relators allege that the facilities failed to discharge patients who were not terminally ill, which in turn increased the length of stay and total medical expenses for these patients. This practice is in direct violation of the False Claims Act because it resulted in false billing information being submitted to Federal and state-funded healthcare programs for reimbursement for services that were medically unnecessary.

Joanne Cretney-Tsosie was the original relator who blew the whistle when she filed her lawsuit in 2012. Within her Complaint, Tsosie argues that, as a Registered Nurse/Patient Care Manager at one of Genesis’s subsidiaries, she witnessed firsthand how the company’s hospice patient compliance practices were in direct violation of the Patient Protection and Affordable Care Act of 2010 (PPACA). Under the PPACA, medical providers that deliver hospice-based care must conduct face-to-face interactions with the patient in question to certify that they qualify to receive hospice care. Tsosie contends that her colleagues falsified records to indicate that face-to-face interactions had been conducted when they hadn’t, which again increased the length of stay for patients who otherwise were ineligible to receive hospice care.

Collectively, the relators are set to receive close to $10 million for their involvement in exposing the healthcare fraud scheme. If you are aware of a company that is engaging in government programs fraud, do not hesitate to take action. The law firm of Tycko & Zavareei LLP may be able to assist you in bringing your own qui tam lawsuit under the False Claims Act, acting as a whistleblower on behalf of the U.S. government. Successful qui tam whistleblowers can receive, as their reward, between 15% and 30% of the amount recovered for the government. If you would like to consult with one of our False Claims Act attorneys please fill out our Confidential Case Evaluation form, or call (202) 973-0900 to speak with a lawyer within our firm.