Nursing-home firm to pay $48 million to settle Medicare fraud case

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A Mission Viejo-based nursing-home operator has agreed to pay $48 million to settle allegations that he submitted inflated bills to Medicare for therapy sessions that were unnecessary or never took place, prosecutors said.

The federal settlement agreement with Ensign Group Inc., which operates nursing homes across the West Coast, was unsealed late Monday by a federal judge in Los Angeles.

The case stems from two whistle-blower lawsuits filed by a pair of former Ensign employees, the U.S. attorney’s office said.


“The case against the Ensign Group involves a company that regularly bilked Medicare by submitting inflated bills that, in some cases, sought money for services that simply were never provided to patients,” U.S. Atty. André Birotte Jr. said in a statement.

From 1999 to 2011, six Ensign facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that weren’t medically necessary.

The lawsuits alleged that Ensign incentivized therapists to increase the amount of therapy provided to their patients in an effort to meet planned targets for Medicare revenue, regardless of whether the patients needed the treatment.

The six Ensign facilities are the 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 and Victoria Care Center in Ventura.

It has yet to be determined how much money the two former Ensign employees, Gloria Patterson and Carol Sanchez, will receive. Provisions under the federal False Claims Act allow private citizens to file suits on behalf of the government and share in any recovery.



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