On February 14, 2020, Diversicare Healthcare Services, Inc. (the “Company”) entered into a settlement agreement to resolve the previously disclosed investigation by the U.S. Department of Justice and the State of Tennessee. The investigation originated from a false claims action filed under seal in July 2012 relating to therapy services provided prior to that date. The final settlement resolved allegations related to the Company’s practices and policies for rehabilitation and other services, for preadmission forms required by TennCare and for Pre-Admission Screening and Resident Reviews required by the Medicare program. Under the terms of the settlement, which are consistent with the Company’s prior announcements and disclosures, Diversicare will pay a total of $9.5 million over a five year period and could be required to make additional payments in the event the Company sells any of its owned facilities during this five year period.

As a part of the settlement, the Company also entered into a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General (“OIG”) that will remain in place for five years. The CIA obligates the Company to implement and maintain specific personnel and policies intended to insure its compliance with applicable laws, including an annual audit of submitted claims by an independent review organization. The CIA also requires the Company to report any non-compliance and to submit annual reports and sets forth penalties for non-compliance by the Company with the terms of the agreement, including possible exclusion from federally funded healthcare programs for material violations of the agreement.

A copy of the press release describing the settlement is attached as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference in its entirety.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Number Exhibit

99.1Press release dated February 19, 2020

Diversicare Healthcare Services, Inc. Exhibit
EX-99.1 2 ex991cidsettlementagreement.htm EXHIBIT 99.1 Exhibit             Company Contact:  Investor Relations:James R. McKnight,…
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About Diversicare Healthcare Services, Inc. (NASDAQ:DVCR)

Diversicare Healthcare Services, Inc. provides post-acute care services to nursing center patients and residents in approximately nine states, primarily in the Southeast and the Southwest United States. The Company’s post-acute care services to patients and residents include skilled nursing, ancillary healthcare services and assisted living. In addition to the nursing, personal care and social services that are provided in long-term care centers, the Company offers a range of rehabilitative, respiratory and other ancillary services. The Company’s operations consist of approximately 60 nursing and senior housing centers with approximately 6,060 licensed nursing beds. Its nursing centers range in size from 48 to 320 licensed nursing beds. The nursing centers provide nursing healthcare services, including nutrition services, recreational therapy, social services and laundry services. The Company operates in Alabama, Florida, Indiana, Kansas, Kentucky, Missouri, Ohio, Tennessee and Texas.