Judge orders DOJ to pay legal fees for HCR ManorCare in rehab claims case

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The Department of Justice will have to pay HCR ManorCare legal fees after a judge slammed its handling of a whistleblower case against the provider.

The case, which the DOJ joined in 2015, alleges ManorCare “knowingly and routinely submitted” false claims for rehabilitation services that were not necessary.

The DOJ and ManorCare have recently battled over information provided by expert witness Rebecca Clearwater, who was called to testify on behalf of the government. Clearwater reportedly had more than 130 pages of handwritten notes pertaining to the case that she did not disclose during her initial deposition, and were found to be inconsistent with her written opinion.

The government, in an October brief, blamed the issue on Clearwater's misunderstanding of what she had to produce as part of her deposition, arguing that “there was no bad faith on the part of the government.” But ManorCare bashed the DOJ's handling of the notes' disclosure in a brief filed last month, The National Law Journal reported Friday.

“DOJ's arrogant and cavalier attitude towards its discovery obligations in this case is no longer confined to fact discovery, but has also carried over to the experts upon whom DOJ's case completely relies,” ManorCare's attorneys wrote. “At this point it hardly matters if DOJ is dishonest or incompetent, or both.”

In a ruling filed on Oct. 27, U.S. Magistrate Judge Theresa Carroll Buchanan agreed with ManorCare, striking Clearwater's expert report and lambasting the DOJ.

“I have looked at this stuff, and I'm appalled, I'm embarrassed, I'm ashamed that the Department of Justice would rely on this kind of nonsense by a nurse reviewer to get involved in a qui tam case and cost these defendants millions of dollars in legal fees,” Buchanan said.

Buchanan said ManorCare could recoup the legal fees it spent fighting the DOJ. She called the the case a  “huge waste of money,” but stopped short of dismissing it. A spokeswoman for the provider declined to comment on the judge's ruling. A summary judgment hearing in the case is scheduled for Thursday.

ManorCare scored another win last week, when landlord Quality Care Properties granted it another extension on the deadline to respond to a receivership complaint. The provider will now have until Dec. 1 to respond, QCP said.