Record Fine for Nursing Homes

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 fraud in the Medicare system.

The settlement is subject to court approval.

Beverly, based in Fort Smith, Ark., also said its profit from operations in the quarter fell in line with estimates to $13.2 million, or 13 cents a share, from $21.5 million, or 20 cents, a year ago.