Justice News

Acting Assistant Attorney General Joyce R. Branda Delivers Remarks at Press Conference Announcing False Claims Act Resolution with Extendicare
Washington, DC
United States
Friday, October 10, 2014

Thank you Stuart for that introduction, for your leadership on the Elder Justice Initiative more broadly, and your commitment to pursuing those who provide materially substandard care to our senior citizens.

The United States began investigating Extendicare as part of the Elder Justice Initiative’s proactive effort to monitor the quality of care provided by the largest nursing home chains in the country.  Based upon available federal data and state survey data, we identified Extendicare as a national chain where the care rendered to residents appeared to be well below that provided by its peers in the industry.   The government also investigated two complaints filed by whistleblowers against Extendicare.  One whistleblower filed in Pennsylvania in 2010 alleging billing for unnecessary therapy, while the other whistleblower filed in Ohio in 2013 alleging materially substandard care at an Extendicare facility in Ohio. 

After an extensive nationwide investigation by federal and state authorities, our team found evidence of serious quality of care problems at many Extendicare-managed facilities in the 2007 to 2013 timeframe.  The team focused its investigation on a core group of 33 Extendicare facilities in 8 states that were the most troublesome.  The eight states involved with this settlement are: Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.

At those facilities, the team found many serious problems with the delivery of care.  These problems stemmed in large part from Extendicare’s business model – a model that was driven more by profit and less by the quality of the care it provided.  Extendicare employed fewer skilled nurses than were needed to care for the very sick residents in those facilities and failed to properly train and supervise the staff it did have.   Specifically, the company failed to provide appropriate catheter care to some of its residents, failed to follow the appropriate protocols to prevent pressure sores or falls by residents, and failed in some cases to safely administer medications.  As a result of these pervasive problems, the investigation identified many disturbing examples of falls, fractures and head injuries to residents – often unnoticed by the staff for hours – as well as malnutrition, dehydration, pressure ulcers and infections - some of which required amputations and unnecessary hospitalizations.  Moreover, the chronic staff shortages and poorly trained staff meant that residents who needed assistance with feeding and toileting didn’t get that assistance, many residents were not washed, resulting in poor hygiene, fluids were not provided, and residents were not re-positioned for comfort and to prevent pressure ulcers.  Our team’s investigation revealed that Extendicare inappropriately admitted very sick residents without the ability to provide adequate care to them.  The result was that the short-term residents did not get the minimum skilled care that they needed and Extendicare’s long-term care residents were often ignored.  

As a result of the government’s investigation, Extendicare agreed to pay $28 million to resolve allegations that it billed Medicare and Medicaid from 2007 to 2013 for materially substandard skilled nursing services – services that were so deficient that they were effectively worthless at 33 of its 146 skilled nursing facilities.  As Stuart indicated, this is the largest chain-wide skilled nursing facility quality of care settlement resolved by the United States.

The government team also investigated allegations that Extendicare provided and then billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services.  Medicare bases the daily rate at which a skilled nursing facility can bill for a Medicare patient, in part, on the amount of skilled therapy provided to a patient during a seven day assessment period.  As such, the more minutes of skilled therapy provided during that assessment period, the higher the daily rate the provider can charge Medicare for that patient.  In this case, the government found that Extendicare, through its subsidiary, ProStep, provided medically unreasonable and unnecessary rehab therapy services, particularly during the assessment periods.  Not only do these unreasonable and unnecessary services result in overcharges to the Medicare Trust fund.  Even more significantly, they risk harm to the elderly residents who are put through therapies that they don’t need and that can tax them physically.

As part of today’s settlement, Extendicare will pay an additional $10 million to resolve these allegations involving medically unreasonable and unnecessary rehabilitation therapy services rendered at 33 of its skilled nursing facilities from 2007 to 2013.                                          

As the Acting Associate Attorney General observed earlier, this Extendicare settlement is a significant example of an investigation where the department worked closely with its federal and state partners to return funds to the Medicare Trust Fund and require a comprehensive compliance program to improve the quality of resident care with appropriate oversight.  I want to thank our partners from the Office of Inspector General for the Department of Health and Human Services, and those who are participating by telephone today – David Degnan, Assistant U.S. Attorney for the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and Assistant Attorney General Michael Pellicciotti from the Washington State Attorney General’s office.  I understand that Michael will be available to answer any questions you may have.  I also want to thank the other state Attorneys General who provided such invaluable assistance throughout this investigation.

This agreement is groundbreaking not only because of the size of the quality of care settlement, but also because of the innovative nature of this chain-wide corporate integrity agreement which focuses on remedying the wrongs that the Extendicare team uncovered.  I will now turn it over to Gregory Demske, the Chief Counsel to the Inspector General for the Department of Health and Human Services to discuss the specific nature of the corporate integrity agreement negotiated by his office.

Updated October 10, 2014