Beverly to Settle Medicare Fraud Charges

Beverly Enterprises Inc. said it will reimburse the government $170 million and pay a $5-million fine in a tentative settlement of Medicare fraud charges. The nation’s largest nursing home operator said it will take a second-quarter pretax charge of $199 million to cover the cost of the settlement. The payment would be the largest ever by a nursing home company over alleged Medicare fraud. Beverly was the subject of a criminal grand jury probe into whether it inflated bills for nurses’ pay, part of a nationwide crackdown on Medicare fraud. The settlement is subject to court approval. Fort Smith, Ark.-based Beverly also said its profit from operations in the quarter fell to $13.2 million, or 13 cents a share, from net income of $21.5 million, or 20 cents, a year ago, in line with estimates. Revenue fell 12% to $633.7 million. Including charges from the settlement and other costs, Beverly had a loss of $115.9 million, or $1.13. Beverly shares rose 25 cents to close at $5.56 on the NYSE.