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Ensign’s Medicare Billings Targeted in Federal Fraud Probe

Healthcare firm receives new civil subpoena the same month it settles six year old bribery case.

May 15, 2024

The Ensign Group (ENSG), a provider of skilled nursing, senior living, and rehabilitative services, received a civil investigative demand (CID) from the U.S. Department of Justice (DOJ) in January of 2024 indicating the company’s Medicare and Texas Medicaid billings are being scrutinized for potential fraud.

Specifically, Ensign is being investigated for potentially billing Medicare for unnecessary patient services and billings as well as the receipt of other revenue to which it may not have been entitled.

The CID covers the period from January 1, 2016 to the present.

In 2018, Ensign received a CID from the DOJ in connection with an investigation into whether the company had bribed medical directors. The federal probe was sparked by a whistleblower complaint.

Though the DOJ declined to pursue the matter two years later, the whistleblower moved forward with a suit of their own.

In January 2024— the same month Ensign received the new fraud related CID— the company settled the six year old whistleblower litigation for $48 million, which the DOJ must review and sign off on.

The settlement, excluding a half decade of legal costs, is:

— 4.7% of Q1 2024 revenue
— 18.8% of 2023 operating income
— 18.6% of the consensus estimate for 2024 free cash flow

Ensigns executive officers have received cash bonuses each of the last three years with CEO Barry Port’s total three year compensation topping $26 million.

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