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Milwaukee Nursing Homes to Pay $38M for Substandard Care, But Not to Residents They Harmed

A recent story in the Milwaukee Journal Sentinel disclosed that Extendicare Health Services Inc., which owns a chain of nursing homes in Milwaukee, has reached a $38 million settlement for substandard and unnecessary care given to residents between 2007 and 2013. However, none of that money is earmarked for the patients who suffered; the bulk of it is going to the U.S. government and some to state government, with more than $2 million going to two private citizen whistleblowers. Why nothing for the seniors? Because this wasn’t an action for personal injury, it was a qui tam lawsuit alleging fraud against the government.

The federal False Claims Act (and state laws that mirror its provisions) allows private citizens (so called qui tam plaintiffs) to sue persons or corporate entities when they have evidence of fraud against the government. The government has the option to join the suit, as the Department of Justice did in this case. The action alleged that Extendicare and its subsidiary, Progressive Step Corp., bilked Medicare and Medicaid out of millions by charging for substandard skilled nursing services, as well as unnecessary rehabilitation, physical therapy and occupational therapy. In this suit, the government was the victim.

The False Claims Act allows whistleblowers to collect a percentage of the damage award that the government recovers from the accused fraudster. Extendicare admitted no wrongdoing, but in agreeing to a settlement, the company assured a huge payday for the whistleblowers. Still, what about the seniors?

Nursing home residents are extremely vulnerable and deserve every protection the law can provide. Fortunately, this government action shined a light on Extendicare’s abuses without compromising the residents’ right to sue on their own behalf. This is not a double jeopardy situation, so any seniors who were harmed during the period of time this settlement encapsulates, should contact an elder attorney to inquire about their rights.