Genesis Healthcare's Willow Creek facility in Clovis, California.
Genesis Healthcare’s Willow Creek facility in Clovis, California. (Courtesy photo)

Genesis Healthcare Inc. has agreed to pay more than $53 million to settle whistleblower lawsuits filed across the country alleging the company and its subsidiaries submitted false claims to the government for unnecessary therapy and hospice services and provided substandard care in its nursing homes.

Officials at the Department of Justice announced the settlement with the Kennett Square, Pennsylvania-based nursing home and rehabilitation therapy company Friday morning. According to the DOJ release announcing the deal, the company settled five separate civil False Claims Act lawsuits filed across the country: One each in the Northern District of California, the Northern District of Georgia, and District of Nevada, and two in the Western District of Missouri.

“Health care providers that falsify claims for unauthorized or unnecessary services steal precious taxpayer dollars, and we will aggressively seek to recover those funds for the program that needs them,” said U.S. Attorney for the Northern District of Georgia John Horn in the press release announcing the settlement.

“We are committed to protecting the federal health care programs and the patients who are enrolled in them,” added U.S. Attorney Brian Stretch of the Northern District of California. “We will continue to vigorously pursue companies and individuals who provide care that is grossly deficient or unnecessary.”

Genesis will pay $53.6 million, including interest, under the settlement executed June 9.

A statement from the company issued Friday seems to link the allegations to developments prior to Genesis’ acquisitions of health care providers in Georgia and Nevada.

“Genesis denies the allegations in these legacy matters that arose prior to the acquisition of Sun Healthcare in 2012 and the combination with Skilled Healthcare in 2015,” the firm wrote. “Genesis operates in a heavily regulated industry and is pleased to resolve these legacy matters acquired in the Sun Healthcare and Skilled Healthcare transactions.”

The DOJ announced that the seven whistleblowers who alerted the government to the underlying billing issues will receive a total of $9.67 million as part of the nearly $53.64 million recovery.

The settlements resolve four separate sets of allegations. Prosecutors accused a Genesis subsidiary in Nevada of billing Medicare for hospice services for patients who weren’t terminally ill and inappropriately billing for some physician evaluation management services. They accused Genesis subsidiaries in Georgia of billing for medically unnecessary unskilled outpatient services. In California, the company faced allegations of submitting false claims to Medicare and the state’s Medi-Cal system by failing to staff nursing homes with enough nurses to meet residents’ needs. Prosecutors accused other facilities of fraudulent billing for therapy services.

Lawyers at Morgan, Lewis & Bockius, including health care partner Kathleen McDermott in Washington, D.C., have represented the company in the cases.

Ross Todd is bureau chief of The Recorder in San Francisco. He writes about litigation in the Bay Area and around California. Contact Ross at rtodd@alm.com. On Twitter: @Ross_Todd.

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