Shares of Ensign Group Inc. fell early Thursday after the Mission Viejo-based nursing home operator said federal investigators searched a service center and six of its nursing homes as part of a Medicare billing probe.
Ensign’s stock was down about 14% at the close of trading with a market value of $300 million.
The searches were part of a Justice Department probe that began in 2006. The probe focuses on what Ensign called “an investigation of claims submitted to the Medicare program for rehabilitation services.”
Ensign gets about half of its $467 million in yearly sales from Medicare, the federal health insurance program for the elderly.
The company said it is cooperating with the investigation and called the searches a step toward resolving the matter.
Federal investigators ended up searching fewer facilities than the 18 originally targeted, the company said.
Ensign runs 63 nursing homes.
The six searched facilities, all in Southern California, were subject to a review by outside investigators hired by Ensign from late 2006 to early 2008.
That review found no systemic or patterns and practices of fraudulent or intentional misconduct, according to Ensign.
The federal probe appears to have begun in 2006 as part of a whistleblower’s claim, according to the company.
