Beverly Settles on Bad Medicare Billings

Fort Smith’s Beverly Enterprises Inc. reached a final settlement Oct. 15 with the Centers for Medicare and Medicaid Services, agreeing to repay the federal government $175 million in fraudulent billings. The settlement involves Medicare reimbursement problems since 1996.

A charge of $77.5 million was recorded in the fourth quarter of 2001 for the expected settlement. The company announced that the previously recorded charge included $35 million in cash to be paid to Medicare and Medicaid Services within the month.

Beverly operates 29 assisted-living facilities, 55 home care and hospice centers, and 154 outpatient therapy clinics.

n Beverly’s stock rose 11.2 percent after the healthcare services provider reiterated its pro forma earnings outlook of 12 cents per share Oct. 11. During the session, the company’s stock fell to $1.60, a 52-week low, after an announcement by Kindred Healthcare Inc. revising it’s third-quarter earnings estimates that day. Kindred’s estimate change stemmed from a reported $55 million jump in liability claims during the quarter.

The company said it planned to divest itself of its nursing-home operations in Florida, where a majority of the liability claims were generated. It operates 18 nursing facilities in Florida. Beverly divested itself of its Florida facilities last year.

Kindred lost 43 percent of its value during the session, falling to $11.88 per share. Beverly closed at $205 per share.