The federal government is investigating possible violations of the federal False Claims Act by Integrated Health Services, the company acknowledged last week in its latest filing with the Securities and Exchange Commission.
The Sparks, Md.-based nursing home giant has made a $39.5 million provision for settlement of the government claims, but it warned that the government's review has not been completed and that any final settlement could "differ significantly" from that amount. The investigations may also cover alleged violations of Medicare rules, the company said. Neither the company's spokesman nor officials of the U.S. Justice Department would comment further.
Government investigations into Medicare billing violations by long-term-care companies are common, with at least two other bankrupt national nursing home chains, Vencor and Sun Healthcare Group, now under scrutiny.
IHS, which filed for bankruptcy protection in February, had previously disclosed a government investigation into Medicare billing practices for barium swallow studies, a diagnostic that nets the company about $2 million per year.
For the year ended Dec. 31, 1999, the company reported a $2.2 billion loss, or $14.87 per share, on revenue of $2.6 billion. IHS operates 366 nursing homes, 17 specialty hospitals and nine hospices.