Nursing Home Repeat Fraud Settlements: The Same Operator, Different Allegations

Nursing home repeat fraud settlements can involve new allegations about older conduct. A nursing home’s second settlement can cover conduct before its first agreement, as Sava’s later therapy and care case did. Ensign, Life Care and SavaSeniorCare each appear in separate health care fraud matters involving different alleged practices.

Behind the billing allegations are residents whose treatment allegedly followed revenue targets instead of their needs, and taxpayers paying the bills. If you know the therapy targets, the care behind the bill or the contracts that brought business into the home, you may recognize what sits behind the familiar company name.

Ensign’s Therapy and Medical-Director Settlements

The Ensign Group’s earlier settlement concerned therapy billed by six California facilities. Its later case concerned alleged referral payments through medical-director arrangements.

The Department of Justice announced the therapy settlement on November 19, 2013. Ensign agreed to pay $48 million over allegations covering 1999 through 2011. The government alleged unnecessary therapy, inflated claims for therapy that had not been delivered and stays extended beyond medical need. Corporate revenue targets allegedly pushed treatment away from what each resident needed. Former therapists brought the whistleblower cases. The settlement covered the six facilities, while the accompanying corporate integrity agreement reached nationally.

Ensign’s annual filing reports a matching settlement payment in 2024 for the separate medical-director case. The government declined to join, and the whistleblower continued the case.

The amended complaint alleged a revealing gap in the documentation behind medical-director compensation:

The earlier allegations put therapy records beside the bills. The later allegations put physician compensation beside the work and referrals behind it. Someone who handled those contracts or payments would know a different part of the business from the therapists who saw the treatment targets.

Life Care’s Care Case Came Before Its National Therapy Case

Life Care Centers of America’s Lawrenceville care case and its later national therapy case covered successive conduct periods. The earlier matter concerned whether residents received the care they needed. The later one concerned therapy allegedly driven by payment targets.

The Lawrenceville consent order required Life Care to pay $2.5 million in a 2005 settlement. The allegations covered January 1998 through November 2005 and included failures in diabetes management, nutrition, hydration, medication, falls prevention and pressure-ulcer care. Those failures were tied to claims for care that allegedly failed to meet residents’ needs.

The national therapy settlement, announced on October 24, 2016, was $145 million. It covered alleged Medicare and TRICARE billing conduct from 2006 through 2013. Former employees brought the whistleblower cases, and the government joined them.

The government alleged that Life Care pushed residents into the highest therapy-payment category and kept treatment going after therapists thought it should end. Its complaint described the starting assumption:

The patient was supposed to determine the treatment. The alleged target worked backward from a daily therapy commitment and made the patient’s needs the exception to it.

The national case’s conduct began after the year of the Lawrenceville settlement. It also concerned a different alleged practice and a broader set of claims.

The later settlement included a five-year, chain-wide corporate integrity agreement with independent review of therapy necessity and appropriateness. The Department of Justice announced a $29 million whistleblower award.

Sava’s Later Case Reached Back Before Its Pharmacy Settlement

SavaSeniorCare’s later therapy and care settlement covered periods that began before its earlier pharmacy settlement and continued afterward.

In the pharmacy matter, the government alleged that Omnicare paid $50 million in a transaction involving a small pharmacy business while Mariner and Sava committed nursing-home pharmacy business to Omnicare. The government alleged that the payment bought access to the nursing homes’ pharmacy business.

Mariner Health Care and SavaSeniorCare Administrative Services were among the settling parties in the February 26, 2010 resolution. The settlement was $14 million.

The May 21, 2021 Sava resolution concerned different payment and care decisions. The therapy allegations covered October 2008 through September 2012. The government alleged pressure to reach the highest Medicare therapy categories, unnecessary or unskilled treatment and delayed discharges. The resolution also covered Medicaid coinsurance claims for residents eligible for both programs.

The care allegations covered January 2008 through December 2018. They concerned insufficient staffing, failures in pressure-ulcer and falls protocols, and medication failures that allegedly left residents with care so poor it was worth little or nothing. Here, the connection ran from the staffing and care delivered to the services billed to Medicare and Medicaid.

Both conduct periods crossed the earlier pharmacy settlement. The later case reached back into the operator’s past and forward beyond that resolution, while examining therapy and resident care rather than the pharmacy transaction.

Sava agreed to approximately $11.2 million, based on what it could afford, with additional payments tied to its finances. The resolution also required a five-year corporate integrity agreement, independent review of stays and paid claims, and an independent care monitor.

The Operator, Contractor and Acquired Business Have Different Roles

Healthcare chains operate through facility companies, landlords, management companies and outside service providers. The clinical record, the contractor’s invoice and the Medicare claim can come from different places within that arrangement.

Under Medicare’s consolidated-billing rules, the facility bills for bundled services during a covered Part A stay, including therapy. Medicare pays the facility, and its contract determines payment to an outside supplier. That places the therapy contractor’s treatment decisions upstream of the facility’s bill.

Kindred bought RehabCare in 2011. The Department of Justice’s 2016 therapy resolution required $125 million from the contractor group and separately resolved claims against four facility customers. The government alleged automatic placement in the highest payment category, inflated assessment-period minutes, evaluation or unskilled time counted as therapy, and services reported but never delivered. It also alleged that customers failed to prevent those practices.

The contractor and the facility occupied different positions in the same billing chain. An acquisition added another company name to the history. Following who directed treatment and who submitted the claim explains why those names appear together.

The Payment Rules Belong to the Conduct Year

The therapy allegations in these older operator cases arose under payment rules that tied reimbursement categories to therapy minutes. Under that system, inflating minutes or concentrating therapy during an assessment period could move a resident into a higher-paying group.

Medicare replaced those therapy-minute groups with the Patient Driven Payment Model on October 1, 2019. The model classifies residents by clinical characteristics and needs. A settlement announced after that change can still concern the earlier system. Sava’s therapy conduct period ended before the change, although its settlement came later.

Emergency rules created a different billing question in the ReNew Health Group matter. A COVID-era waiver removed the prior three-day hospitalization requirement in qualifying circumstances while retaining the need for skilled care. In its 2024 settlement announcement, the Department of Justice alleged that ReNew billed based merely on proximity to someone with COVID-19 and routine vital-sign checks. The issue was what qualified the resident for the billed skilled stay.

What Evidence Is Needed to Prove Fraud?

Useful evidence connects what happened to the resident or referral payment with what the facility claimed and who directed that decision. For a repeat-operator comparison, the dates and corporate names on those records are part of that connection.

A therapist may know why recorded minutes changed or why treatment continued after a discharge recommendation. A nurse may connect the staffing roster to care that residents missed. Someone handling medical-director contracts may know what work the payments bought and how admissions entered the discussion. Which records matter, and how they fit together, is what we work out with you. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What Happened Inside the Home

If you recognize the same treatment targets, unexplained physician payments or gaps between billed care and care delivered, speak with our nursing home fraud whistleblower experts. We build the case strategy around your knowledge and bring in skilled nursing facility whistleblower lawyers who understand the billing, contracts and care decisions involved. From your first call, we stay beside you to build your strongest nursing home whistleblower case.