Government Cracks Down on Medicare Fraud in California

According to a recent article in the LA Times, a California nursing home firm has agreed to pay $48 million to settle a Medicare fraud case. The lawsuit that led to the settlement was part of a national effort by the Department of Justice to crack down on false billing.

California Nursing Homes Accused of Medicare Fraud

Two therapists who used to work for Ensign Group Inc., a company that operates nursing homes in several states, accused the company of performing unnecessary rehabilitation therapy at six nursing facilities in California. They filed whistle-blower lawsuits in 2006, though the government stated the fraud lasted from 1999 to 2011.

False claims were allegedly submitted by the following facilities:

  • Atlantic Memorial Healthcare Center in Long Beach
  • Panorama Gardens in Panorama City
  • Orchard Post-Acute Care in Whittier
  • Sea Cliff Healthcare Center in Huntington Beach
  • Southland in Norwalk
  • Victoria Care Center in Ventura

NewsDaily noted that the company was also accused of offering incentives to employees to achieve high Medicare revenue targets. Therapists allegedly had to bill at higher rates or extend therapy for patients who didn’t need it to reach these targets.

Cracking Down on Medicare Fraud

The Department of Justice published a press release on the case on November 19, 2013, noting that in addition to paying the settlement amount of $48 million, Ensign Group agreed that each of its skilled nursing facilities would be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. The company denied any illegal conduct, and stated it agreed to the settlement only to resolve the allegations and avoid protracted litigation.

A partnership between the Attorney General and the Health and Human Services Inspector General created the Health Care Fraud Prevention and Enforcement Action Team (HEAT) in 2009, which is focused on reducing and preventing Medicare and Medicaid financial fraud. Since January 2009, the Justice Department has recovered more than $16.7 billion through False Claims Act lawsuits.

The False Claims Act allows private citizens to bring suit on behalf of the government and share in any recovery. Gloria Patterson and Carol Sanchez”the whistleblowers in the Ensign Group case”took advantage of this provision. Others who wish to report similar potential cases of fraud can visit the Department of Justice’s website at

Statistics Show Billions of Unnecessary Payments

Medicare fraud costs American taxpayers. The Coalition Against Insurance Fraud, Medicare and Medicaid made an estimated $23.7 billion in improper payments in 2007, and paid dead physicians claims totaling up to $92 million from 2000 to 2007. It also paid more than $1 billion in questionable claims for 18 categories of medical supplies that patients didn’t appear to need.

The FBI estimates that health care fraud on the whole costs the country an estimated $80 billion a year, and that it’s only increasing. They provide the following avoidance tips:

  • Never sign a blank insurance form, or give blanket authorization to a medical provider to bill for services rendered.
  • Ask your healthcare providers what they will charge and what you will be expected to pay out-of-pocket.
  • Review your insurer’s explanation of benefits statement. Call if you have questions.
  • Avoid salespeople who tell you that services of medical equipment are free.
  • Give your insurance and Medicare identification only to those providing medical services.