The U.S. Justice Department announced Friday that Extendicare Health Services, one of the widest chains of nursing homes in the United States, will pay $38 million to settle federal allegations of fraud and poor patient care.
Federal investigators explained that the nursing homes failed to employ more nurses to provide adequate care for the residents of 33 homes. The government probe discovered that residents had problems such as sustaining head injuries, dangerous falls and bed sores. Some of the residents were also dehydrated and malnourished because the insufficient care. Some were also exposed to infections that required hospitalizations.
"Nursing home residents should not be subject to unreasonable or unnecessary rehabilitation therapy that is dictated by a company's profits rather than patient needs," said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.
The settlement with the company is considered the largest settlement involving a nursing home. The government will receive $32.3 million and the rest will be distributed to eight state Medicaid programs. The two whistleblowers will also receive at least $1.8 million and $250,000, respectively.
"These problems stemmed in large part from Extendicare's business model - a model that was driven more by profit and less by the quality of care it provided," Acting Assistant Attorney General Joyce R. Branda told the New York Times.
Extendicare immediately denied the allegations and clarified that they chose to settle to avoid spending more money if they go to trial. The Canadian company also agreed to be monitored under the government's compliance program, according to the Wall Street Journal.
"We are pleased to finally put this matter behind us and look forward to continuing our efforts to deliver quality care and services to our patients and residents," Extendicare Chief Executive Officer Tim Lukenda said in a written statement.
