Extendicare has settled federal government charges against the company for improper billing and poor care for $38 million. The Justice Department reported that this is the largest nursing home chain settlement for providing substandard care in the department’s history. Both problems were brought to light from whistleblower lawsuits.
Extendicare is a Canadian company, but it’s the seventh largest nursing home operator in the U.S.; it owns 150 nursing homes in 11 states. The New York Times reports that among the charges brought were:
• A failure to hire enough nurses to provide care needed in 33 of its homes
• This failure lead to “pervasive problems” including serious falls, head injuries and bed sores that could have been prevented
• Patients were malnourished and dehydrated, and some developed preventable infections that led to hospitalizations.
The Justice Department has made it clear that none of these events are accidental or due to negligent oversight. Rather, the department went on record accusing Extendicare of deliberately seeking profits at the expense of patient care. Joyce R. Branda, an acting assistant attorney general, said “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 care it provided.”
The overbilling charges stemmed from exaggerated bills for physical therapy services. Medicare bases its payment rates to providers on the amount of physical therapy a patient needs. Providers like Extendicare have figured out that they can defraud the government by overbilling with the strategy of exaggerating the amount of physical therapy that a patient needs.
Disturbing evidence was submitted that Extendicare places dollar signs ahead of patient well-being. An email written by an Extendicare manager stated that a patient’s inability to participate in physical therapy, because of the patient’s seizure condition, was a “missed opportunity.” The email went on to lament the loss this way: “Financial loss of 2300 bucks!!!!” and “We have to step up and make sure that this doesn’t happen again!!!!”
The settlement agreement requires Extendicare to participate in a five-year corporate integrity agreement with an independent auditor to measure staff levels and other quality indicators. All of the homes in the chain must comply with the agreement, not just the 33 homes found specifically at fault.
Extendicare issue a statement stating that it “vehemently” denies any wrongdoing and suggested it had settled the case only to avoid years of expensive litigation. The company said: “We are very proud of the care and services we provide and have demonstrated our commitment to quality care through our ongoing quality improvement efforts.”