One of the country's largest nursing home chains was recently hit with a $38 million negligence and fraud settlement. This type of healthcare fraud is common in poorly-operated nursing homes throughout the country. Any evidence or suspicion of fraud is a red flag of systemic negligence in a nursing home.
Extendicare was charged with billing Medicare and Medicaid for unnecessary and inappropriate services, such as physical therapy, in 33 nursing homes. Extendicare owns and operates 150 nursing homes in 11 states. This is the largest settlement in the Justice Department's history involving nursing home fraud.
Prosecutors for the federal government said that Extendicare failed to hire enough nurses to properly care for residents in its facilities. Understaffing of this nature is rampant in nursing home owned by large chains and can lead to severe problems, such as more frequent falls and bedsore development
They went on to say that the care provided at these 33 facilities was so poor that many residents became dehydrated, malnourished, and suffered infections. This led to unnecessary hospitalizations, head injuries, and a considerable decrease in quality of life.
The claims against Extendicare's nursing homes were first filed by a whistleblower in Ohio who accused the company of poor care. Another whistleblower in Pennsylvania also accused the company of inflating their Medicare reimbursements, providing unnecessary care to residents to increase how much they could bill the government. More information on the Pennsylvania whistleblower can be found here.
Medicare reimburses healthcare centers based on the amount of rehabilitation services a resident needs. Nursing homes, particularly for-profit chains, often exaggerate how much rehab a resident needs to milk money from Medicare and Medicaid. The nursing home chain Ensign, for example, recently agreed to a $48 million settlement for similar fraud charges.
The Obama Administration has made nursing home investigation and prosecution a top priority in the justice system. Overall, investigators go after nursing homes that defraud Medicare and Medicaid, and then pursue problems with resident care such as understaffing and overmedication. Poor care and government fraud go hand in hand: if a nursing home is unethical enough to subject residents to unnecessary treatments, it is surely taking other measures to cut costs at the expense of resident safety.
Thus, prosecuting nursing homes for health care fraud not only protects taxpayer funds, but protects the health and safety of residents as well. This was demonstrated in Extendicare's suit by internal emails shown in court. One Extendicare executive expressed concern that a resident with a seizure condition was physically unable to participate in physical therapy. He described this as a "missed opportunity ... a financial loss of 2300 bucks."
The settlement included terms requiring Extendicare to enter a five-year integrity agreement. This will have an independent monitor assess Extendicare facility's staffing levels among other quality measure to make sure it is making improvements. Fortunately, this agreement applies to all 150 Extendicare nursing homes in the U.S.
The rise in for-profit nursing home chains is pervasive - over 70% of nursing homes are now for-profit - at the cost of elderly, sick and vulnerable residents. These chains operate to please investors, not residents, and skimp on the most critical aspects of care like trained nurses and medical supplies.