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Extendicare Health Services to pay $38 million in settlement

WASHINGTON – A nursing home chain 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, the Justice Department said Friday.

A federal investigation into Extendicare Health Services Inc. 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.

“Protecting this nation’s vulnerable populations, including our seniors, has been and continues to be one of this department’s highest priorities,” acting Associate Attorney General Stuart Delery said.

The federal government accused the company of substandard care, between 2007 and 2013, in 33 of its skilled nursing homes in eight states: Ohio, Pennsylvania, Wisconsin, Indiana, Kentucky, Michigan, Minnesota and Washington.

Two facilities in Washington were part of the settlement, in Bremerton and Vancouver, according to the Washington Attorney General’s Office. Extendicare operates three facilities in the Spokane area: Franklin Hills Health & Rehabilitation; the Gardens on University; and Cherrywood Place.

The settlement is with Extendicare and its subsidiary, Progressive Step Corp., the Justice Department said.

Of the settlement proceeds, roughly $32 million will go to the federal government, and the eight state Medicaid programs will receive the rest. Washington’s total share of the resolution is roughly $1 million, according to the state attorney general’s office.

Tim Lukenda, president and chief executive of Extendicare, said in a statement that the company was “pleased to finally put this matter behind us.” The company has denied any illegal conduct and is not admitting wrongdoing as part of the settlement.

“We have already invested substantial resources to enhance our existing compliance program over the past several years,” he said.

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 chains in the country. In addition, two whistleblowers had filed complaints in 2010 and 2013 alleging either billing for unnecessary therapy or substandard care.

The company also will enter into a five-year, chainwide compliance agreement with the Department of Health and Human Services. The agreement will require the company to retain an independent monitor and make other changes.


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