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

September 2, 2025

Author: Suzanne E. Durrell,

A client of Whistleblower Law Collaborative co-founders, Robert M. Thomas, Jr. and Suzanne E. Durrell, along with Hirst Law Group, P.C., and Bird, Marella, Rhow, Lincenberg, Drooks, & Nessim, LLP reached a settlement in 2024 of over $47.3 million in a whistleblower case filed in 2015 against The Ensign Group, Inc., and Ensign Services, Inc. (“Ensign”). The settlement resolved the whistleblower client’s allegations that Ensign, who operates skilled nursing facilities nationwide, knowingly engaged in fraud perpetrated against Medicare, Medicaid, and other government health care programs. Ensign acknowledged the settlement at page 65 of its 2024 Annual Report. The claims resolved by the settlement are allegations only and there has been no determination of civil liability.

Whistleblower Exposes 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.

The whistleblower 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.

FCA Qui Tam Complaint Alleges Example of Kickbacks

The whistleblower’s Second Amended Complaint alleged that, as part of her work, she 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.”

Whistleblower Alleged She Tried to Stop Ensign’s Conduct

The whistleblower alleged that she complained about the fraud she observed but could not get Ensign to change its conduct. In particular, she alleged that she tried to change 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

The Whistleblower and Her Lawyers Litigated the Case for Over Four Years

When the government declined to intervene to litigate the FCA case in 2020, but allowed the whistleblower to proceed, her attorneys at 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 in 2024. Gary Lincenberg of Bird Marella applauded the client for her willpower in seeing through this lengthy matter which was difficult to relive and thanked his co-counsel for their excellent work.

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

For her efforts in bringing and prosecuting the FCA case over nine and one-half years, the government awarded the whistleblower a share of the settlement.

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.