In a recent press release, the Department of Justice (DOJ) announced a $104 million settlement paid by Vencor Inc., a large nursing home group, and Ventas Inc., a real estate investment trust.
This settlement marked the largest payout ever under the False Claims Act and the second largest False Claims Act settlement ever paid in a nursing home case.

It will put to rest claims that Vencor, Inc. one of America’s largest nursing home groups, failed to provide sufficient health care at its long term care facilities. The company was also charged with knowingly submitting false claims to TRICARE, the military’s health care program, Medicare and Medicaid.

More than $20 million of the total $104.5 million False Claims settlement will apply to failure of care claims. Those claims contain charges of inadequate staffing, failure to meet residents’ dietary needs, and improper care of patient ulcers.

The balance of the settlement contains allegations of over-billing for supplies and respiratory care services. More than $54 million charged improper claims on Vencor’s cost reports submitted to Medicare.

Vencor, of Louisville, Kentucky and Ventas will resolve some administrative non-fraud Medicare claims by a $25 million payment to the government. Vencor will reimburse Medicare for overpayments of about $90 million. They have already paid about one third of that amount, according to the government.

Although Vencor filed for bankruptcy in September 1999, the U.S. Bankruptcy Court for the District of Delaware has allowed for the terms of this settlement to be admitted into the bankruptcy.

The government’s allegations stem from whistleblowers who filed claims on behalf of the government in nine civil suits under whistleblower provisions of the False Claims Act.

Those whistleblowers will share more than $15 million of the $104.5 million received. Cooperation between concerned employees acting as whistleblowers and the government has resulted in a number of settlements.

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