By Peninsula Daily News staff
and news services
WASHINGTON — A nursing home group has agreed to pay $38 million to resolve allegations that it billed Medicare and Medicaid for substandard care at nearly three dozen facilities around the country.
A federal investigation into Extendicare Health Services Inc. and its subsidiary, Progressive Step Corp., accused the company of failing to provide appropriate care, follow safety protocols or maintain enough skilled nurses.
Those lapses in some cases resulted in head injuries to residents, falls, bed sores and fractures and cases of malnutrition, dehydration and infection, the government said Friday.
Extendicare, a Canadian company whose U.S. headquarters is in Milwaukee, is the seventh-largest nursing home operator in the country, ranked by the number of beds, according to Provider Magazine, an industry publication.
The publicly traded company said in a statement on Friday that it “vehemently” denied any wrongdoing and had settled the case to avoid years of costly litigation.
The federal government accused the company of substandard care, between 2007 and 2013, in 33 of its skilled nursing homes in Washington and seven other states: Ohio, Pennsylvania, Wisconsin, Indiana, Kentucky, Michigan and Minnesota.
Extendicare operates 146 skilled-nursing facilities in 11 states.
Progressive Step, its subsidiary, provides physical, speech and occupational rehabilitation services.
Washington facilities
Extendicare has two locations on the North Olympic Peninsula and 13 other Washington facilities in Auburn, Bainbridge, Bremerton, Centralia, Edmonds, Olympia, Shelton, Spokane and Vancouver.
Its two Peninsula facilities are Crestwood Health and Rehabilitation Center in Port Angeles and Sequim Health and Rehabilitation in Sequim.
Sequim Health and Rehabilitation recently received two top national awards for excellence in providing high-quality care.
Crestwood is also the recipient of quality-care awards.
The U.S. Justice Department did not identify any of the facilities in Washington and the seven other states where investigators allegedly discovered substandard care.
Alison Dempsey-Hall, acting communications director for the state Office of the Attorney General in Olympia, told the Peninsula Daily News on Saturday said two of the 33 Extendicare facilities were in Washington — Forest Ridge Health and Rehabilitation in Bremerton and Pacific Specialty and Rehabilitative Care in Vancouver.
“We are pleased to finally put this matter behind us and look forward to continuing our efforts to deliver quality care and services to our patients and residents,” said Tim Lukenda, president and CEO of Extendicare, in a message posted on the company website.
“We have already invested substantial resources to enhance our existing compliance program over the past several years.
“EHSI is a leader in the for-profit sector in registered nurse staffing levels and has made significant improvements in direct care staffing levels year over year as reported by Long Term Care Trend Tracker.”
Broader effort
Joyce Branda, acting head of the Justice Department’s Civil Division, said the department began investigating Extendicare as part of a broader effort to look into the quality of care provided by the largest nursing home groups in the country.
In addition, two whistleblowers had filed complaints in 2010 and 2013, alleging either billing for unnecessary therapy or substandard care.
The settlement with Extendicare is the largest settlement in the department’s history involving a nursing home group accused of providing substandard care to residents.
Of the settlement proceeds, roughly $32 million will go to the federal government to compensate Medicaid, Medicare and various federal health care programs for harm suffered as a result of the company’s conduct, the Justice Department said. The eight state Medicaid programs will receive the rest.
Washington’s total share of the resolution is roughly $1 million, with $541,871 returning directly to the state Medicaid program.
In addition, as part of the resolution, Extendicare and Progressive must enter into a five-year “corporate integrity agreement” with the U.S. Department of Health and Human Services to ensure the level of care.
Also, Extendicare is required to conduct a comprehensive compliance program that must include both internal and external reviews of quality of care, and annual reviews of Medicare claims by an independent auditor.
Medicare’s rates are based on the amount of rehabilitation therapy that a patient needs.
In this case, federal prosecutors argued that the quality of care was so substandard that Medicare and Medicaid should not have paid for the services because they were essentially worthless.
The federal government has entered into several similar exaggerated-billing agreements with nursing home groups in recent years, including a $48 million settlement with the Ensign Group chain in 2012.
But advocates for nursing home residents have criticized the federal government for failing to pursue the groups for problems with care.
On Friday, officials said they were planning to investigate more such cases and would use the False Claims Act to do so.
The act allows the government to go after people or companies that defraud government programs.
