Ensign Pays Over $47 Million to Settle Claims in Whistleblower Suit Alleging Fraud and Kickbacks

BOSTON, Sept. 2, 2025 /PRNewswire/ -- Whistleblower Law Collaborative LLC, Hirst Law Group, P.C., and Bird, Marella, Rhow, Lincenberg, Drooks, & Nessim, LLP announced today a settlement of over $47.3 million in a whistleblower case against The Ensign Group, Inc., and Ensign Services, Inc. ("Ensign"). The settled claims, brought in a lawsuit filed by a whistleblower in 2015, resolve allegations that Ensign knowingly engaged in fraud perpetrated against Medicare, Medicaid, and other government health care programs.

The complaint, filed as a qui tam suit under the federal and California False Claims Acts (FCAs), alleged that nationwide Ensign knowingly paid kickbacks to physicians for referrals of patients to Ensign's skilled nursing facilities (SNFs) in violations of the FCAs, the federal and California Anti-Kickback Statutes, and the federal Stark self-referral law. The complaint also alleged that Ensign violated a previous Corporate Integrity Agreement (CIA) that Ensign signed with the Department of Health and Human Services (HHS) in 2013 as part of an earlier False Claims Act case settled by the company.

The whistleblower worked as a former Contracts Manager at Ensign. In that role, she was responsible for reviewing, tracking, and monitoring contracts entered into by Ensign's Facilities. She also served on the Company's Compliance Committee where one of her responsibilities was to ensure that payment provisions in Ensign's contracts were in accordance with the law. The whistleblower alleged that she complained about the fraud she observed but could not get Ensign to change its conduct.

As the second amended complaint alleged, as part of her work, the whistleblower observed, among other fraud, that:

• Ensign made inflated monthly payments to physicians to serve as medical directors and in other "consulting" capacities, when those excessive payments were designed to induce the doctors to refer patients to the Ensign's SNFs;
   
• Ensign SNF administrators admitted that while they used to pay for patient referrals with "donuts," they were now paying for referrals with "dollars";
   
• Another Ensign administrator admitted that he performed a return on investment calculation to determine the number of referrals needed from each doctor to break even on the monthly payments made to those doctors -- and that he would raise or lower the payments to the doctors based on their number of referrals; and
   
• Ensign paid thousands of dollars each month for multiple medical directors and consultants. At one SNF alone, Ensign paid four doctors to serve as "medical directors" and paid at least ten additional doctors for "consulting agreements."

The whistleblower alleged that she attempted to stop the fraud by changing the contracts to institute hourly rates tied to actual work and fair market value, rather than excessive monthly lump sum payments to induce referrals, but her attempts were overridden by Ensign.

Whistleblower Law Collaborative and Hirst Law Group filed the FCA qui tam suit on behalf of the whistleblower, who alleged that Ensign had both engaged in fraud and failed to disclose its illegal conduct to the government as required. When the government allowed the whistleblower to proceed with the FCA suit in 2020, Whistleblower Law Collaborative and Hirst Law Group went forward with the case with Bird Marella as taint counsel. The team proceeded to successfully litigate the case for four years and were in the midst of discovery when the settlement was reached.

Suzanne E. Durrell, of Whistleblower Law Collaborative, said: "Patients deserve to know that their doctors' recommendations for services and the place of service are not tainted by illegal kickbacks. Unfortunately, kickbacks can undermine competition, lead to medically unnecessary services, and drive up the cost of health care." Robert M. Thomas, Jr. of the firm added: "Sometimes the government declines to intervene in an FCA case for reasons unrelated to the merits of the case; we are glad the government trusted us to move the case forward and that we were successful."

Michael A. Hirst, of Hirst Law Group, stated: "We congratulate the whistleblower for her courage and persistence. She has shown that one person, willing to stand up for what she knows is right, can make a difference."

Gary Lincenberg applauded the client for her will power in seeing through this lengthy matter which was difficult to relive and thanked his co-counsel for their excellent work.

For her efforts in bringing and prosecuting the FCA case, the government awarded the whistleblower a share of the settlement.

Hirst stated: "The whistleblower is exactly the kind of deserving person that the False Claims Act envisions. Without her courage in coming forward, none of this would likely have come to light."

The claims resolved by the settlement are allegations only and there has been no determination of civil liability.

The case was investigated for the government by Senior Trial Attorney Kelley C. Hauser of the Commercial Litigation Branch of the Civil Division of Department of Justice, the U.S. Attorney's Office of the Central District of California, and Supervising Deputy Attorney General Quisteen S. Shum of the California Department of Justice.

Whistleblower Law Collaborative LLC based in Boston devotes its practice entirely to representing whistleblowers nationwide. The firm was chosen by Law360 as a Health Care Group of the Year in February 2023 and is recognized as a Best Law Firm by Best Lawyers®. For more information, contact the firm at 617.366.2800 or email Suzanne Durrell at [email protected].

Hirst Law Group, P.C. represents whistleblowers in federal and state False Claims Act, SEC, CFTC, and other whistleblower programs around the country. Recognized again in 2025 by Super Lawyers and additionally the 2025 Top 50 Lawyers in America list, cases handled by the firm's employees, both while working for the United States and since joining the firm, have recovered hundreds of millions of dollars and have been reported on television, radio, and newspapers nationally and abroad. A case involving the largest recovery against a single hospital in US history was the subject of a book "Coronary" (Simon and Schuster, 2007), and the firm has also been featured in the books "Whistleblower" and "Retaliation" (Bay Tree Publishing, 2010, 2013). The firm includes a former United States Attorney's Office supervisor of False Claims Act cases and a former Government fraud auditor. For more information, contact the firm at 530.756.7700 or email Michael Hirst at [email protected].

Bird, Marella, Rhow, Lincenberg, Drooks & Nessim LLP recently won the award for Impact Case of the Year at the 2025 Benchmark Litigation U.S. Awards for its historic trial win in USA v. Chamberlain. This year Mr. Lincenberg earned the Daily Journal's California Lawyer of the Year Award.

SOURCE Whistleblower Law Collaborative LLC, Hirst Law Group, P.C., Bird, Marella, Rhow, Lincenberg, Drooks & Nessim LLP