Originally Posted - August 19, 2006

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Beverly Enterprises, Inc. has agreed to pay $20 million to settle allegations that its former wholly owned subsidiary, MK Medical, violated the civil False Claims Act.

According to filings with the U.S. Security and Exchange Commission, former President George H.W. Bush, father of Florida's Gov. Jeb Bush and President George W. Bush, is a major stockholder in Beverly and its subsidiaries.

According to the settlement agreement, the United States alleges that MK Medical submitted false claims for payment to the Medicare and Medi-Cal programs from 1998 until 2002, while Beverly owned the company. MK Medical, a wholesaler of durable medical equipment (DME) which is now defunct, billed Medicare and Medi-Cal for DME provided to the programs' beneficiaries without obtaining the proper documentation. For example, MK Medical was required to obtain a certificate of medical necessity (CMN) signed by a physician before providing most types of DME to Medicare and Medi-Cal beneficiaries. The United States alleges that, in numerous instances, the CMNs in MK Medical's files were incomplete, had been altered, or had been filled in by MK Medical personnel in areas reserved for physicians.

Beverly has agreed to settle these allegations by paying $14,487,278 to the United States and $5,512,722 to the State of California. No action has been filed in court. The Medicare program is funded by the federal government, while the Medi-Cal program is jointly funded by the federal government and California.

Beverly and its operating subsidiaries are leading providers of health care services to the elderly in the United States.

AseraCare is a subsidiary of Beverly Enterprises and James Avery, the former medical director for Woodside Hospice in Pinellas Park where Terri Schindler Schiavo was a patient from April 2000 until her death in March 2005, is the national medical director for Aseracare, a position he has held since December 2004.

It has been speculated that the Bush holdings in Beverly and its subsidiaries may have played a major role in the Schiavo case, perhaps explaining why the U.S. Department of Justice failed to become involved in the case despite egregious violations of the Americans With Disabilities Act, civil rights violations and alleged Medicaid and Medicare fraud.

In announcing its prosecution of Beverly, Kevin V. Ryan, U.S. Attorney for the Northern District of California, said that 'Health care fraud is one of the priorities of this office. We are committed to pursuing allegations of fraud against federal health care programs and to safeguarding federal funds against false claims".

However, despite allegations of Medicare and Medicaid fraud involved in the Schiavo case, apparently no investigation was ever conducted even though Terri was admitted to the hospice without the proper certification according to the admittance papers and was not, as required, certified terminal. Neither were the required recertifications on file.

As the result of a previous investigation conducted by the U.S. Department of Justice, Beverly Enterprises was found guilty of defrauding Medicare and Medicaid of $460 million. Beverly's CEO William Floyd received $1.288 million in salary in 2001 plus stock options worth $2.3 million more at the same time Beverly was paying back $77.5 million in 2001 and $175 million for a 2001 settlement to resolve charges that the company defrauded Medicare of $460 million.

Avery left Hospice of Florida Suncoast which had been caught defrauding the government and its taxpayers of $14.8 million, and become the medical director of a national entity which has been charged with defrauding the government of $460 million.

Beverly Enterprises Inc. contributed $70,000 to the George W. Bush 2005 Inauguration Committee. 8-19-06

© 2006 North Country Gazette