Vencor, Ventas settle with Gov't.

$20M to be paid on failure-of-care claims

VENCOR INC. AND ITS LANDLORD, VENTAS Inc., have agreed to pay $219 million to settle allegations of Medicare and Medicaid abuse, the Department of Justice (DOJ) reports. Together, the Louisville, Ky.-based companies will pay the U.S. government $104.5 million to resolve civil claims that Vencor knowingly submitted false claims to Medicare, Medicaid, and TRICARE, the military's health care program. Acting Assistant Attorney General Stuart E. Schiffer stated that, "This case should put the long term care industry on notice that we will hold accountable those institutions that care for our nation's most vulnerable citizens, even where the institution has filed for bankruptcy."

Largest settlement of its kind

Failure-of-care claims account for more than $20 million of the False Claims Act settlement. According to the DOJ, this is the largest failure-of-care settlement to date. It covers false claims related to inadequate staffing, improper treatment of pressure sores, and failure to meet some residents' nutritional needs. The remaining portions of the $104.5 million settlement include more than $54 million for improper claims made on Vencor's hospital Medicare cost reports and more than $24 million for over-billing for respiratory-care services and supplies.

Vencor and Ventas will also pay the government $25 million to resolve administrative non-fraud-based Medicare claims. Vencor separately is reimbursing Medicare for other overpayments totaling approximately $90 million. Vencor filed for protection under federal bankruptcy laws in September 1999. The settlement with the government is part of the company's reorganization, which was entered into March 16 by the U.S. Bankruptcy Court for the District of Delaware. It allows Vencor to emerge from bankruptcy as Kindred Healthcare Inc. Under a Corporate Integrity Agreement, Vencor is required to improve quality of care and hire an independent monitor to oversee the process.

Ventas has admitted no wrongdoing in reaching the settlement. The company was held liable because it was part of Vencor until it split as a separate entity in 1998. Ventas is now a REIT whose properties include 45 hospitals, 218 SNFs, and eight personal-care facilities in 36 states. Vencor is its primary tenant.

Vencor did not respond to CLTCs calls seeking comment.