Nursing Home Chain Pays $38 Million in Abuse LawsuitOctober 10, 2014 — The U.S. Department of Justice (DOJ) has announced a $38 million settlement with a major nursing home chain to resolve claims that they harmed patients by giving substandard care.

Extendicare Health Services, Inc., operated 146 nursing homes in 11 states. Between 2007-2013, prosecutors found 33 facilities in eight states that failed to provide adequate care. The facilities were located in Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.

For example, facilities did not have enough nurses, they did not provide adequate catheter care, and failed to take appropriate steps to prevent ulcers (bed sores) and falls.

Extendicare also had patients undergo unnecessary treatments so that it could bill Medicare for those patients at the highest rate possible per day. Residents were subjected to unreasonable rehabilitation therapy that was dictated by the company’s profits, rather than the patient’s needs.

According to the Justice Department:

“Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services.”

The lawsuit was filed under False Claims Act, which allows private citizens to file a lawsuit on behalf of the United States of America and share in the recovery. One citizen, Tracy Lovvorn, will receive more than $1.8 million for exposing “upcoding” of patients to receive higher reimbursement from Meidcare. Donald Gallick will receive more than $250,000 for exposing worthless service in Ohio.

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