$52.7 Million Settlement with Nation’s Largest Long-Term Care Company: Garcia & Artigliere & Faulkner Represent Plaintiff Involved

Los Angeles, Calif. On behalf of qui tam plaintiff Terri West, Garcia & Artigliere & Faulkner filed a False Claims Act case against a skilled nursing facility that was fraudulently billing for Medicare and Medicaid/MediCal reimbursement. The case was part of a greater U.S. Department of Justice investigation of Genesis Healthcare, the largest long-term care company in the U.S., which led to payment by Genesis and its related entities for $52.7 million.

The case involved several subsidiaries of Genesis, including Woodland Care Center, a 24-hour skilled nursing facility where West was employed as a speech pathologist and Director of Rehabilitation for more than three years. Through access to facility records and patient files, West noticed that Woodland Care Center was routinely providing specialized care to patients who were not proper candidates for treatment and billing Medicare and Medicaid/MediCal for the services. She was regularly asked to provide speech pathology treatment to patients who did not need it, and treatment was often continued even when there were no signs that it was helpful.

West voiced her concern several times with no response from her supervisors until January 2011, when she was put on administrative leave and given the opportunity to apply for a job at another facility that was located too far away for her to feasibly work there, effectively terminating her employment.

“We are honored to have played a part in bringing to light an unlawful practice which not only defrauds the taxpayers of this country, but also deprives required care to the elder and infirm residents of the facilities,” said Attorney Stephen Garcia. “Hopefully having paid dearly for this practice, fraudulent billing and a failure to provide care to elders for which they are paid will end in Genesis facilities.”

Allegations and Background

West worked at Woodland Care Center from October 2007 to January 2011 in several different positions, including Speech Pathologist, Director of Speech Pathology and Director of Rehabilitation. She has nearly 40 years of clinical speech pathology experience and more than 20 years of experience working in skilled nursing facilities.

From her experience, West knew that healthcare facilities are reimbursed by Medicare and Medicaid/MediCal based on a per-diem rate determined by the level of care each patient requires. West first noticed Woodland Care Center’s odd financial practices when she became Director of Rehabilitation and allegedly learned that her position included a bonus structure that was based on the profits of the facility. In her decades of experience, she had never seen a facility reward staff for increasing profits without regard for patient outcomes.

The lawsuit stated that through her daily work, West recognized that the facility was routinely providing patients with rehabilitation that they did not qualify for; continuing treatment even when there were no signs that it was actually improving patient health; and misclassifying services as skilled treatment when it was not. West alleged that when she confronted her supervisors about specific patients and the treatments that they were receiving, they were removed from her patient list or transferred to another speech pathologist.

She also raised her concerns about the facility’s practices in September 2010 at a rehabilitation staff meeting, where she explained that the then-Director of Rehabilitation had asked her to treat patients even when they only needed a modification of their diet plan.

A few months later, West was apparently asked to sign a Compliance Statement certifying that she believed the facility was in compliance with all Medicaid standards. She refused to sign the statement and was approached by the Director of Rehabilitation in December 2010. West again raised her concerns about how Woodland Care Center was billing for patients.

Finally, in January 2011, the lawsuit stated that West brought forth the files of 10 patients who were receiving speech pathology treatment even though they showed no improvement over time or there was no documented need for treatment in the first place. Several of these patients were scheduled to have rehabilitation five times a week for weeks at a time, without consideration for whether the treatment was helping.

The lawsuit alleged that in response, West was placed on administrative leave and not allowed to return to Woodland Care Center. She was told she could apply for positions at other facilities in the company, but they were located too far away from West’s home and there was no guarantee that she would be hired.

Later, West allegedly was informed that the facility stopped giving speech therapy treatments to the patients whose files she called attention to just before being placed on leave, which she believed was further evidence that those patients were not proper candidates for speech therapy treatment.