Proposed settlement largest ever for LTC provider
Proposed settlement largest ever for LTC provider
Beverly Enterprises’ announcement that it has reached a "tentative understanding" with the Department of Justice that carries at least $175 million in civil and criminal penalties has sent shock waves through the nursing home industry. "It’s definitely a heads-up’ for all health care providers about the seriousness with which the government is looking at all compliance issues, but in particular the issues concerning allocation of cost to the Medicare program," asserts Susan Kayser, an attorney with Arent Fox in New York City.
The giant nursing home chain has been under investigation by federal authorities since 1998 regarding the allocation of nursing labor hours into the Medicare program.
Beverly says it will reimburse the government $170 million under the tentative civil settlement as well as a criminal fine of approximately $5 million. The government has yet to comment because the agreement has not been finalized.
Kayser says the tentative agreement should signal providers that have to allocate costs to keep careful accounting of how much time is being spent in the Medicare-certified unit.
The legal community was taken aback by the size of the settlement. "Obviously, it is a huge number that Beverly is turning over to the government and I think that says a lot," says Kayser, who specializes in long-term care.
But she also expressed surprise that under the agreement 10 nursing homes will be excluded from participation in the Medicare and Medicaid program.
"Ten separate centers of operation is unusual despite their size," Kayser notes. In all, Beverly has 563 nursing homes. To the extent those ten homes rely on Medicare and Medicaid revenue, they are now out of business.
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