Ensign Group Completes Five-Year OIG Oversight Agreement

Leading skilled nursing provider The Ensign Group (Nasdaq: ENSG) on Thursday announced that it has successfully completed a five-year Department of Health and Human Services (HHS) oversight period.

The Mission Viejo, Calif.-based company initially entered into a corporate integrity agreement (CIA) with the HHS Office of the Inspector General (OIG) back in October 2013; at the time, the agreement was part of a larger $48 million False Claims Act settlement over allegations of improper therapy provision.

The Department of Justice accused six Ensign facilities of falsely submitting Medicare claims for medically unnecessary physical, occupational, and speech therapy services between 1999 and 2011, while also inflating the amount of therapy hours provided.

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As is common in False Claims Act cases, Ensign elected to settle while admitting no wrongdoing and vigorously denying any illegal conduct. The DOJ also noted that its claims against the company remained allegations and were not findings of fact.

“We already have made and will continue to make significant investments in our infrastructure to enhance our compliance program, and we are confident that we are well prepared to comply with the terms of a corporate integrity agreement,” CEO Christopher Christensen said in an October 2013 statement.

Under the terms of the CIA, Ensign agreed to scrutiny of its existing compliance program or risk potential exclusion from the Medicare and Medicaid programs.

“The CIA acknowledges the existence of our current compliance program, and requires that we continue during the term of the CIA to maintain a compliance program designed to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs,” the company reported in a February 2014 filing with the Securities and Exchange Commission.

That process formally wrapped up on March 13 of this year, Ensign reported Thursday, after the OIG received the fifth annual report under the agreement, along with other supporting documentation.

“The OIG confirmed that it received the Company’s fifth and final annual report and that the term of the CIA is now concluded,” Ensign noted.

False Claims Act cases have emerged as the federal government’s primary cudgel against health care facilities accused of defrauding Medicare and Medicaid, though the potential legal defense costs for operators typically prompt them to select the settlement route. Whistleblowers who alert regulators to potential wrongdoing are generally entitled to share in the eventual settlement cash, though in Ensign’s case, the government did not disclose the exact amount that went to the pair of former therapists who contacted officials.

Since Congress modernized the FCA in 1986, the federal government has collected about $59 billion in settlements, with $2.8 billion in the most recent fiscal year — $2.5 billion of which came from health care operators.

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