Medicare Compliance & Reimbursement

Million-dollar settlement brands 13 nursing homes with charges of mistreatment.

Even if a budget crunch makes long-overdue improvements seem more like luxuries than necessities, providers should consider the price tag that prosecutors can slap you with for failing to uphold quality standards.

Franklin, TN-based Advocat, Inc. will be forking over $1.3 million to fill that order. The company is paying up because of allegations that it provided poor quality of care at 13 of its Arkansas nursing homes, where it was known as Diversicare Management Services.

Arkansas Attorney General Mike Beebe said Sept. 13 that as part of the agreement, Advocat will be required to spend $600,000 to install sprinkler systems, and $300,000 to improve staff training and patient care in homes across the state. In addition, Advocat will pay $400,000 into the Arkansas Medicaid Program over the next two years.

Advocat is accused of failure to provide necessary care, rehabilitation, treatment, supervision and medical services. The state also alleged that employees failed to carry out prescribed treatment plans, and failed to report health problems altogether or in a timely fashion.

Some facilities purportedly submitted fraudulent billings to Medicaid for inadequate or non-provided care.

"These lawsuits were not meant to financially damage Advocat; they were meant to improve the nursing-home care they provide to Arkansas residents," Beebe said. "The last thing we need is fewer nursing homes operating in our state."

According to Beebe's office, Advocat does not admit any wrongdoing.

Lesson Learned: Crossing off basic care may cost facilities more in the long run.