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Recent Compliance Updates & Tips

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The DOJ whistleblower (qui tam) False Claims Act case brought in 2015 against HCR ManorCare, which operates 281 skilled-nursing care and rehabilitation facilities in 30 states, alleged that ManorCare “knowingly and routinely submitted” false claims for rehabilitation services that were not necessary. A federal judge recently struck down a key expert witness called to testify on behalf of the government. The witness reportedly had more than 130 pages of handwritten notes pertaining to the case that she did not disclose during her initial deposition, and were found to be inconsistent with her written opinion. The judge struck her testimony, declaring, “I don’t think this case should have ever been brought . . . I have looked at this stuff, and I’m appalled, I’m embarrassed, I’m ashamed that the Department of Justice would rely on this kind of nonsense that cost these defendants millions of dollars in legal fees.” The judge ordered the DOJ to pay legal fees to HCR ManorCare, only stopping short of dismissing the case after calling it a “huge waste of money.”

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The original allegations indicated that ManorCare exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in providing medically unreasonable and unnecessary services to patients, and that ManorCare increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged. The judge’s actions and rulings resulted in the government’s case against ManorCare falling apart. Within a week of the judge’s decision, government lawyers moved to drop the lawsuit entirely. In a joint motion, the DOJ and ManorCare stated that the government expressed its “intent to move to dismiss this case with prejudice.”

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