A Medical Device Daily

The Ensign Group (Mission Viejo, California), the parent company of the Ensign group of skilled nursing, rehabilitative care services and assisted living companies, reported that representatives of the U.S. Department of Justice served search warrants on its Service Center and six of its Southern California skilled nursing facilities.

The warrants were issued as part of the department's ongoing investigation, which began in 2006, of what a DoJ investigator has previously characterized as "an investigation of claims submitted to the Medicare program for rehabilitation services" at one or more Ensign facilities. Ensign has disclosed and discussed the DoJ investigation in its prior public filings.

General Counsel Greg Stapley said Ensign viewed the warrants as a positive step toward resolution of the DoJ's investigation. "We have long offered to cooperate with the DoJ in their investigation, and today we got that chance," he said.

Stapley noted that the warrants focused on only six facilities, representing a narrower inquiry than past subpoenas issued by investigators, which together had targeted 18 of Ensign's 63 facilities. The warrants also limited the scope of the inquiry primarily to records from calendar years 2005, 2006 and 2007.

All of the six facilities included in the investigation, along with several others, were the subject of an internal investigation initiated by the company and conducted by an independent investigatory counsel from late 2006 through early 2008, the company said. The outside investigators concluded their investigation without identifying any systemic or patterns and practices of fraudulent or intentional misconduct, it added.

The DoJ investigation appears to have begun in 2006 as a qui tam, or "whistleblower," claim. As is typically the case, the original claim remains sealed.

An authorized investigative demand involving 10 Ensign facilities was sent to Ensign's bank in early 2007, but was withdrawn by DoJ investigators before it was fulfilled. A subpoena was delivered to Ensign's auditors in late 2007, which identified several additional facilities.

Federal investigators also have interviewed several former employees, but to date have not interviewed current employees or management. No employees were interviewed in connection with today's records assembly.

To date, Ensign said that investigators have not provided any information about the specific nature of their inquiry, although the scope appears to have become more focused based upon the information in the warrant.

Based upon its own investigations, the company said it has no reason to believe that the assertion of criminal charges, civil claims, administrative sanctions or whistleblower actions would be warranted. The company said it will continue to seek information and to cooperate with investigators to address any specific allegations or concerns they may have.