DOJ abandons false claims case against nursing home chain

The U.S. Department of Justice is dismissing its False Claims Act lawsuit against HCR ManorCare, a Toledo, Ohio-based provider of short-term, post-hospital services and long-term care, the nursing home chain confirmed Thursday.

The DOJ sued HCR ManorCare in 2015 for allegedly submitting false claims to Medicare and Tricare for medically unnecessary therapy.

Joining a whistle-blower civil lawsuit, the federal government said the nursing home chain "exerted pressure on SNF [skilled nursing facility] administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients." HCR ManorCare was also accused of keeping patients in facilities longer than medically necessary to increase Medicare payments.

But U.S. Magistrate Judge Theresa Buchanan in a recent hearing criticized the federal government for its actions with the case, HCR ManorCare President, Chairman and CEO Steve Cavanaugh wrote in a letter to employees, patients, families and business partners.

"I don't think this case should have ever been brought," the judge said, according to the nursing home chain. "I'm appalled, I'm embarrassed, I'm ashamed that the Department of Justice would rely on this kind of nonsense." HCR ManorCare added the judge also called the case a "waste of money" and a "'house of cards' built on the testimony of a single alleged expert witness hired by the Department of Justice."

The federal government has since filed a motion saying it intends to dismiss the case.

"The government has stated its intention to dismiss the lawsuit with prejudice, meaning that, with no payment of any kind by HCR ManorCare, the lawsuit is over. To be perfectly clear, we are not settling the case — the government is dismissing it, fully and finally," Mr. Cavanaugh wrote.

Both sides are expected to file formal dismissal motions later this month, according to Skilled Nursing News.


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