Ensign Reaches Settlement Over Whistleblower Fraud Claims
Settlement Highlights Significant Fraud Allegations
The legal team representing a whistleblower has announced a significant settlement with Ensign Group, Inc., and Ensign Services, Inc. The settlement totals over $47 million and addresses serious claims of fraudulent activities involving Medicare and Medicaid. The whistleblower's lawsuit, originally filed in 2015, pointed to a range of misconduct within the company that allegedly included kickbacks to physicians for patient referrals.
Allegations of Fraudulent Practices
The allegations stem from a qui tam suit filed under federal and state False Claims Acts, which asserted that Ensign engaged in unlawful practices. It appears the company knowingly paid physicians kickbacks to ensure a steady flow of patient referrals to its skilled nursing facilities (SNFs). Additionally, the complaint mentioned violations of the federal and California Anti-Kickback Statutes and the federal Stark self-referral law. Importantly, the allegations also noted that the company disregarded a prior Corporate Integrity Agreement signed in 2013 with the Department of Health and Human Services.
Whistleblower's Role and Observations
The whistleblower, a former Contracts Manager at Ensign, played a crucial role in uncovering these issues. She was responsible for monitoring contracts and ensuring adherence to legal standards within her position on the company's Compliance Committee. Despite her internal complaints regarding the fraudulent activities she observed—such as inflated payments to physicians and manipulative referral incentive structures—Ensign reportedly made no changes to its practices.
Specific Instances of Impropriety
Through her tenure, the whistleblower documented various concerning practices, including:
- Excessive monthly payments to physicians meant to encourage patient referrals, which were described as "bulked payments."
- A shift in strategy from using non-monetary compensation to outright cash payments for referrals.
- Calculating return on investment regarding referrals, which influenced payment modifications based on the doctors' referral patterns.
- Disproportionate payments made to several medical directors and consultants across multiple facilities, indicating a systematic approach to incentivizing referrals.
Acknowledgment of the Whistleblower's Courage
The legal representatives involved in the case emphasized the significance of the whistleblower's courage in exposing these issues. Suzanne E. Durrell from Whistleblower Law Collaborative noted that the integrity of patient care necessitates that doctors' recommendations remain free from the influence of illegal kickbacks. Michael A. Hirst of Hirst Law Group commended the whistleblower’s resolve and underscored the potential impact of individual actions in facilitating broader accountability.
Settlement Details and Future Implications
The settlement, while resolving the allegations, does not imply any admission of liability by Ensign. It serves as a crucial reminder of the importance of ethical practices in healthcare and the willingness of individuals to come forth with vital information regarding misconduct. Investigations by the Department of Justice played a significant part in bringing these allegations to light, and the dedicated work of the whistleblower paved the way for achieving justice.
Frequently Asked Questions
What prompted the whistleblower to come forward?
The whistleblower had concerns about potentially illegal practices at Ensign and felt an ethical obligation to report the practices she observed in her role.
What was the outcome of the settlement?
The settlement amounted to over $47 million, which resolves the claims against Ensign but does not include any admission of wrongdoing by the company.
What practices were considered fraudulent?
Ensign was accused of paying kickbacks to physicians for patient referrals, violating several laws related to healthcare fraud.
How did the legal teams support the whistleblower?
Whistleblower Law Collaborative and Hirst Law Group provided legal support and representation throughout the lengthy litigation process.
What does this case imply for future whistleblower actions?
This case emphasizes the importance of whistleblower contributions to uncovering fraud in healthcare and the legal protections available to individuals reporting misconduct.
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