Maryland Provider Reaches $2M Settlement Over False Discharge Claims

An extended battle between a now-defunct nursing home operator and the state of Maryland reached a conclusion this week with a $2.2 million settlement.

Neiswanger Management Services (NMS) agreed to pay that amount to dismiss allegations that it had improperly discharged Medicare residents and falsely billed the state’s Medicaid program, Maryland Medical Assistance.

Back in 2016, Maryland attorney general Brian Frosh filed suit against the five-building chain and its owner, Matthew Neiswanger, claiming that management deliberately discharged residents who were approaching the end of their Medicare eligibility in order to boost profits.

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Medicare reimburses for skilled nursing services in the 100 days after a qualifying hospital stay; should a resident require longer-term care, he or she can either pay out of pocket or receive Medicaid coverage if personal funds have been exhausted. Medicare pays a significantly higher daily rate than Medicaid, which Frosh cited as a reason the NMS facilities forced early, medically risky discharges.

“NMS engages in this unlawful and at times inhumane conduct in order to maximize the amount of money it is paid by taxpayer-funded public health insurance programs,” the attorney general wrote in his complaint.

NMS stopped operating its five facilities this past February, but the case continued until last week, when both parties agreed to the $2.2 million settlement. Under the terms of the deal, Neiswanger is barred from managing or operating nursing homes in the state of Maryland going forward, and he cannot own or operate any facility that participates in the Maryland Medicaid program. Neiswanger also agreed not to seek renewal of his nursing home administrator’s license.

By accepting the terms of the deal, Neiswanger did not admit liability for any of the state’s claims.

Erick Mullen, a spokesperson for the chain, told Skilled Nursing News that NMS has no plans to begin operating in other states.

“Brian Frosh and the State Department of Health ran a vendetta against NMS for sticking up for themselves,” Mullen said in an e-mail. “Frosh made headlines for seeking hundreds of millions of dollars from NMS.  They drove NMS out of the market and [are] now just walking away with table stakes.”

Written by Alex Spanko

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