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These guarantees could result in significant additional liabilities and obligations for us if Pennant were to default on their obligations under their leases with respect to these properties.
−Removed: Department of Justice Civil Investigative Demand — On May 31, 2018, we received a CID from the U.S.
−Removed: Department of Justice stating that it was investigating to determine whether there had been a violation of the False Claims Act and/or the Anti-Kickback Statute with respect to the relationships between certain of our independently operated skilled nursing facilities and persons who serve or have served as medical directors, advisory board participants or other potential referral sources.
−Removed: Additionally, we are aware of a claim filed by an individual related to this matter.
−Removed: As a general matter, our independent operating entities have established and maintain policies and procedures to promote compliance with the False Claims Act, the Anti-Kickback Statute, and other applicable regulatory requirements.
−Removed: We have fully cooperated with the U.S.
−Removed: Department of Justice and promptly responded to its requests for information;
−Removed: in April 2020, we were advised that the U.S.
−Removed: Department of Justice declined to intervene in any subsequent action filed by a relator in connection with the subject matter of this investigation.
+Added: Department of Justice Civil Investigative Demand — On May 31, 2018, we received a Civil Investigative Demand (CID) from the U.S.
+Added: Department of Justice (DOJ) stating that it was investigating to determine whether there had been a violation of the False Claims Act (FCA) and/or the Anti-Kickback Statute (AKS) with respect to the relationships between certain of our independently operated skilled nursing facilities and persons who serve or have served as medical directors.
+Added: We have fully cooperated with the DOJ and promptly responded to its requests for information.
+Added: In April 2020, we were advised that the DOJ declined to intervene in any subsequent action filed in connection with the subject matter of this investigation.
+Added: Despite the decision of the DOJ to decline to participate in litigation based on the subject matter of its previously issued CID, the involved qui tam relator has moved forward with the lawsuit.
+Added: We are vigorously defending this litigation, but expect the costs of defense to be significant given nature of the allegations and the date range contemplated by the complaint.
+Added: time, we are unable to estimate the range of loss and cannot predict the final outcome of this lawsuit.
+Added: If this lawsuit is ultimately resolved against us, the amounts owed, including fines, penalties and other consequences relating to the lawsuit, could have a material adverse effect on our results of operations, financial condition and cash flows.
+Added: As a general matter, our independent operating entities have established and maintain policies and procedures to promote compliance with the FCA, the AKS, and other applicable regulatory requirements.
Litigation — We and our independent operating entities are party to various legal actions and administrative proceedings, and are subject to various claims arising in the ordinary course of business, including claims that services provided to patients by our independent operating entities have resulted in injury or death, and claims related to employment and commercial matters.
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In June 2020, we and our independent operating subsidiaries received a document and information request from the House Select Subcommittee.
−Removed: We and our independent operating subsidiaries have cooperated in responding to this inquiry.
+Added: We and our independent operating subsidiaries cooperated in responding to this inquiry.
In July 2022 and thereafter, we and our independent operating subsidiaries received follow up requests for additional documents and information.
−Removed: We and our independent operating subsidiaries have responded to these requests, and continued to cooperate with the House Select Subcommittee in connection with its investigation.
−Removed: On December 9, 2022, the House Select Subcommittee issued its final report summarizing its investigation and related recommendations designed "to strengthen the nation's ability to prevent and respond to public health and economic emergencies." According to the information provided by the House Select Subcommittee, the issuance of this report was the House Select Subcommittee's final official act.
−Removed: In addition to the potential lawsuits and claims described above, we and our independent operating subsidiaries are also subject to potential lawsuits under the Federal False Claims Act and comparable state laws alleging submission of fraudulent claims for services to any healthcare program (such as Medicare or Medicaid) or other payor.
+Added: We and our independent operating subsidiaries responded to these requests, and cooperated with the House Select Subcommittee in connection with its investigation.
+Added: On December 9, 2022, the House Select Subcommittee issued its final report summarizing its investigation and related recommendations designed "to strengthen the nation's ability to prevent and respond to public health and economic emergencies." According to the information provided by the House Select Subcommittee, the issuance of this report was the House Select Subcommittee's final official act in connection with their assigned responsibilities.
+Added: In addition to the potential lawsuits and claims described above, we and our independent operating subsidiaries are also subject to potential lawsuits under the FCA and comparable state laws alleging submission of fraudulent claims for services to any healthcare program (such as Medicare or Medicaid) or other payor.
A violation may provide the basis for exclusion from federally funded healthcare programs.
Such exclusions could have a correlative negative impact on our financial performance.
−Removed: Under the qui tam or "whistleblower" provisions of the False Claims Act, a private individual with knowledge of fraud or potential fraud may bring a claim on behalf of the Federal Government and receive a percentage of the Federal Government's recovery.
+Added: Under the qui tam or "whistleblower" provisions of the FCA, a private individual with knowledge of fraud or potential fraud may bring a claim on behalf of the federal government and receive a percentage of the federal government's recovery.
Due to these whistleblower incentives, qui tam lawsuits have become more frequent.
−Removed: For example, and despite the decision of the U.S.
−Removed: Department of Justice to decline to participate in litigation based on the subject matter of its previously issued Civil Investigative Demand, the involved qui tam relator is continuing on with the lawsuit and pursuing claims that one or more of our independent operating entities have allegedly violated the False Claims Act and/or the AKS.
−Removed: In addition to the Federal False Claims Act, some states, including California, Arizona and Texas, have enacted similar whistleblower and false claims laws and regulations.
−Removed: Further, the Deficit Reduction Act of 2005 created incentives for states to enact anti-fraud legislation modeled on the Federal False Claims Act.
+Added: For example, and despite the decision of the DOJ to decline to participate in litigation based on the subject matter of its previously issued Civil Investigative Demand, the involved qui tam relator is continuing on with the lawsuit and pursuing claims that one or more of our independent operating entities have allegedly violated the FCA and/or the AKS.
+Added: We are vigorously defending this lawsuit, but expects the costs of defense to be significant given the nature of the allegations and the date range contemplated by the complaint.
+Added: In addition to the FCA, some states, including California, Arizona and Texas, have enacted similar whistleblower and false claims laws and regulations.
+Added: Further, the Deficit Reduction Act of 2005 created incentives for states to enact anti-fraud legislation modeled on the FCA.
As such, we and our independent operating subsidiaries could face increased scrutiny, potential liability, and legal expenses and costs based on claims under state false claims acts in markets where our independent operating subsidiaries do business.
−Removed: In May 2009, Congress passed the FERA which made significant changes to the Federal False Claims Act (FCA) and expanded the types of activities subject to prosecution and whistleblower liability.
+Added: In May 2009, Congress passed the FERA which made significant changes to the FCA and expanded the types of activities subject to prosecution and whistleblower liability.
Following changes by FERA, health care providers face significant penalties for the knowing retention of government overpayments, even if no false claim was involved.
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In addition, we and our independent operating subsidiaries, and others in the industry, are subject to claims and lawsuits in connection with COVID-19 and facility preparation for and/or response to the COVID-19 pandemic.
−Removed: While we have been able to settle or otherwise resolve these types of claims without an ongoing material adverse effect on our business, a significant increase in the number of these claims, or an increase in the amounts owing should plaintiffs be successful in their prosecution of future claims, could materially adversely affect our business, financial condition, results of operations and cash flows.
+Added: While we have been able to settle or otherwise resolve many of these types of claims without an ongoing material adverse effect on our business, a significant increase in the number of these claims, or an increase in the amounts owing should plaintiffs be successful in their prosecution of future claims, could materially adversely affect our business, financial condition, results of operations and cash flows.
In addition, these claims could impact our ability to procure insurance to cover our exposure related to the various services provided by our independent operating subsidiaries to their residents, customers and patients.
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We anticipate that these Reviews could increase in frequency in the future.
−Removed: As of June 30, 2023 and through the filing date of this report, 37 of our independent operating subsidiaries had Reviews scheduled, on appeal, or in a dispute resolution process.
+Added: As of September 30, 2023 and through the filing date of this report, 41 of our independent operating subsidiaries had Reviews scheduled or in process.
CMS announced a new nationwide audit, the “SNF 5-Claim Probe & Educate Review”, in which the Medicare Administrative Contractors will review five claims from each SNF to check for compliance.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.