Ensign, Nationwide Operator of Skilled Nursing Facilities, Pays Over $47 Million to Settle Our Client’s False Claims Act Suit Alleging Fraud and Kickbacks

September 2, 2025

Author: Suzanne E. Durrell,

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 our whistleblower client in 2015, resolve allegations that Ensign, who operates skilled nursing facilities nationwide, knowingly engaged in fraud perpetrated against Medicare, Medicaid, and other government health care programs.

Our Client Blows the Whistle on Ensign’s Alleged Fraud

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 violation 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.

Our whistleblower client was 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.

FCA Qui Tam Complaint Alleges Example of Kickbacks

As the Second Amended complaint alleged, as part of her work, our client 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.”

Our Whistleblower Client Alleged She Tried to Stop Ensign’s Conduct

Our whistleblower client 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.

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.

—Suzanne E. Durrell, Whistleblower Law Collaborative

Whistleblower Law Collaborative and Hirst Law Group filed the FCA qui tam suit on behalf of our whistleblower client, who alleged that Ensign had both engaged in fraud and failed to disclose its illegal conduct to the government as required.

The Whistleblower and Her Team of Lawyers Litigated the Case for Over 4 Years

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.

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.

—Robert M. Thomas, Jr., Whistleblower Law Collaborative

The team proceeded to successfully litigate the case for four years and were in the midst of discovery when the settlement was reached. Gary Lincenberg of Bird Marella 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.

Whistleblower’s Courage and Contributions Recognized 

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

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. She 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.

–Michael A. Hirst,  Hirst Law Group

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

Whistleblower Law Collaborative LLC

Whistleblower Law Collaborative LLC devotes its practice entirely to representing clients nationwide in bringing whistleblower actions.  Our clients bring actions under the federal and state false claims acts, and other whistleblower programs including those addressing health care fraud.  If you are considering becoming a health care fraud whistleblower or are aware of other types of fraud, contact us  for a free, confidential consultation.