False Claims Act settlement to cost Genesis $53.6 million

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Genesis Healthcare will pay more than $53 million to settle six lawsuits.
Genesis Healthcare will pay more than $53 million to settle six lawsuits.

Genesis Healthcare Inc. has agreed to pay more than $53 million to settle six lawsuits that alleged the long-term care giant violated the False Claims Act, the Department of Justice announced Friday.

Among the claims resolved by the settlement were allegations of violations by Skilled Healthcare Group Inc. and two of its subsidiaries. Those allegations included billing Medicare for hospice services for beneficiaries who weren't terminally ill, conducting inappropriate billing of some physician evaluation management services, and submitting claims for medically unnecessary therapy services.

Genesis completed its acquisition of Skilled Healthcare in 2015. The False Claims Act violations are alleged to have occurred before that acquisition took place.

One of Skilled Healthcare Group's subsidiaries also was accused of understaffing and submitting false claims to Medicare and Medi-Cal, California's Medicaid program, for skilled nursing services that were “worthless” and not up to federal standards, authorities said. Genesis Healthcare agreed to pay $52.7 million last year under an “agreement-in-principle” to settle four separate Department of Justice investigations related to staffing.

The settlement also clears up claims that Sun Healthcare Group Inc., SunDance Rehabilitation Agency Inc. and SunDance Rehabilitation Corp. knowingly submitted false claims to Medicare for outpatient therapy services that were unskilled or not medically necessary. Genesis acquired those companies in 2012.

The claims resolved by Friday's settlement “are allegations only,” the DOJ noted, and there was no determination of Genesis' liability. In a statement to McKnight's, Genesis said the settlement was finalized from a previous agreement on June 9 and that the company “denies the allegations in these legacy matters.”

“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 statement reads.