Genesis Healthcare is expected to pay $52.7 million to settle U.S. Department of Justice (DOJ) allegations of federal and state healthcare fraud and abuse laws and regulations.
“While the company denies the allegations and will vigorously defend this action, including any portion of the action that the private party relators may continue to pursue, the Company has accrued a combined $39.1 million as a contingent liability in connection with those four matters,” according to a company statement.
Genesis reached an agreement in principle with the DOJ on the financial terms of a settlement to record an additional loss of $13.6 million in the second quarter of 2016 to increase its previously estimated and recorded liability. The company expects to pay the government over a period of five years once the agreement is finalized.
The company and its subsidiaries are currently involved in four separate litigation and regulator investigations between 2005 and 2013. The DOJ is investigating two instances of violations related to the provision of therapy services claims and hospice services that did not meet Medicare requirements for reimbursement and are in violation of the civil False Claims Act. The DOJ intends to pursue legal action related to staffing and certain quality of care allegations in a disclosed class action lawsuit Skilled Healthcare LLC settled in 2010.
Genesis is a holding company of post-acute care with subsidiaries that have more than 500 skilled nursing centers and assisted/senior living communities. Its subsidiaries also supply rehabilitation and respiratory therapy to more than 1,700 healthcare providers.