Future Brookdale acquisition under federal investigation

Emeritus Senior Living is under federal investigation for alleged improper Medicaid billing, according to ProPublica, news that follows last week's announcement that Brentwood-based Brookdale Senior Living intends to merge with the Seattle-based company in a $2.8 billion deal.

Investigators with the Justice Department and the U.S. Department of Health and Human Services have been exploring allegations of improper Medicaid billing since January 2013, ProPublica reports, and the company has run into the issue before, paying a $1.86 million settlement in a 2007 Texas fraud case.

The state Attorney General’s office alleged that Emeritus improperly billed for services provided at 11 of its facilities in the state and “routinely submitted false claims to the Texas Medicaid program.” Under the terms of the settlement the company denied any wrongdoing. Emeritus was the subject of a ProPublica/PBS “Frontline” series in 2013 that focused on the company's business practices, its entanglements with regulators in numerous states and its lengthy record of safety lapses.

Brookdale's planned acquisition, which is expected to close in the third quarter, will give the company a national market share of about 10 percent. Brookdale executives said they see a potential $100 million of extra revenue by implementing its home health and hospice services into Emeritus properties.

ProPublica reports that Medicaid accounts for a relatively small portion of Emeritus's primarily private payer-based business — 13.9 percent of its revenues came from Medicaid and Medicare in 2012. Karen Lucas, a spokeperson for the company, said Emeritus was "cooperating fully" with federal authorities.

“As a matter of policy, we will not comment on a pending investigation beyond confirming its existence, because cooperation includes not publicly airing information that might compromise or influence the government’s review,” Lucas said.