Nursing home false claims allegations settled with $3.8M payment

The owners, operators and managers of two for-profit nursing homes in Watsonville, Calif., have agreed to pay $3.8 million to settle allegations that they submitted false claims for substandard or worthless services to the Medicare and Medi-Cal programs. Between 2007 and 2012, according to a 2014 complaint filed by the federal government, the defendants persistently overmedicated elderly and vulnerable residents, causing infection, sepsis, malnutrition, dehydration, falls, fractures, pressure ulcers and, for some residents, premature death.

“The allegations in this complaint are appalling,” U.S. Attorney Melinda Haag said in announcing the settlement. “It is my hope that the families whose loved ones suffer at the hands of nursing homes that provide substandard care can find solace in the commitment from me that these owners, operators and managers will be held accountable for their actions.”

Country Villa Watsonville East Nursing Center (renamed Watsonville Nursing Center in 2014) and Country Villa Watsonville West Nursing and Rehabilitation Center (renamed Watsonville Post-Acute Center in 2014) are the two nursing homes named in the complaint. Also named are the homes’ owners, CF Watsonville East LLC and CF Watsonville West LLC; the ARBA Group, which oversaw and controlled the homes’ finances and operations; and the homes’ managers, Country Villa Health Service Corp., doing business as Country Villa Health Services.

CF Watsonville East and CF Watsonville West also have entered into a five-year corporate integrity agreement with the U.S Department of Health and Human Services Office of Inspector General. The agreement requires them to implement and maintain a compliance program and retain an independent monitor to help ensure the nursing homes’ compliance with Medicare and Medicaid regulations and standards of care.

“This case demonstrates our continued commitment to investigate, and hold accountable, individuals and organizations seeking to victimize the elderly through the misuse of taxpayer funded Medicare and Medi-Cal programs,” Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office said in a statement. “The FBI remains vigilant on our continued effort to work with our civil enforcement partners on these cases and will seek to hold those responsible for providing substandard care accountable for both past violations and future compliance.”

Lois Bowers

Lois A. Bowers was senior editor of I Advance Senior Care / Long-Term Living from 2013-2015.