DOJ Files Complaint Against HCR ManorCare for False Claims -- Update

By Angela Chen 

Health-care real-estate investment trust HCP Inc. said Tuesday that the U.S. Department of Justice has filed a complaint against its HCR ManorCare Inc. venture for alleged false claims related to Medicare reimbursement.

The Justice Department complaint, which was released from seal on Monday, follows a civil investigation of lawsuits filed by former HCR employees, according to a regulatory filing. In the previously sealed lawsuits, the employees claimed, under a provision of the federal False Claims Act, that HCR submitted claims to Medicare for therapy services that were unskilled, unnecessary, not covered by the skilled-nursing facility benefit and therefore not covered by Medicare reimbursement.

The cases have now been consolidated in the U.S. District Court for the Eastern District of Virginia.

HCR intends to "vigorously defend" against the civil action, according to the company. In a letter to employees and business partners, it clarified that the case is a "billing dispute" and the company isn't being accused of billing for services it does not provide.

Rather, the lawsuit "stems from the government's view that our industry as a whole is providing a level of care to Medicare rehabilitation patients that exceeds the government's expectations," according to the letter.

Ohio-based HCR operates 283 nursing homes.

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