The Ensign Group, Inc Reaches Settlement



October 2, 2013, Business Wire - The Ensign Group, Inc. (ENSG), the parent company of the Ensign(TM) group of skilled nursing, rehabilitative care services, home health, hospice care, assisted living and urgent care companies, announced today that it has completed and executed a settlement agreement with Department of Justice and has received the final approval of the Office of Inspector General-HHS and the United States District Court for the Central District of California. The settlement agreement fully and finally resolves the previously disclosed DOJ investigation and ancillary claims which have been pending since 2006.

In connection with the settlement and effective as of October 1, 2013, Ensign entered into a five-year corporate integrity agreement with the Office of Inspector General-HHS. In addition, pursuant to the settlement agreement, Ensign will make a single lump-sum remittance to the government in the amount of $48 million in October 2013. Ensign has denied engaging in any illegal conduct, and has agreed to the settlement amount without any admission of wrongdoing in order to resolve the allegations and to avoid the uncertainty and expense of protracted litigation.

"We are pleased to put this matter behind us and look forward to focusing on our mission of providing compassionate care to patients and achieving our goal of setting the standard for high quality healthcare services throughout the industry," said Christopher Christensen, Ensign's President and Chief Executive Officer. "We already have made and will continue to make significant investments in our infrastructure to enhance our compliance program, and we are confident that we are well prepared to comply with the terms of a corporate integrity agreement," he added.

The Company does not expect the settlement and remittance to have a material adverse effect on the Company's long-term financial position, business plan or prospects. The Company will incur ongoing costs associated with enhanced compliance activities, including monitoring expenses and other costs under the corporate integrity agreement as well as interest expense on a portion of the settlement amount, totaling approximately $2.5 million annually. In anticipation of the settlement, the Company recorded a $15 million charge in the fourth quarter of 2012, and increased its reserve by an additional $33 million in the first quarter of 2013.

About Ensign (TM)

The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, urgent care services and other rehabilitative and healthcare services at 119 facilities, seven hospice companies, nine home health businesses and six urgent care clinics in California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa, Nebraska and Oregon. More information about Ensign is available at http://www.ensigngroup.net.