Feds backing out of lawsuit against nursing chain

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The federal government is moving to dismiss a lawsuit it brought two years ago against a national nursing-care provider after a judge tossed out the government's key witness over issues of credibility.

The Justice Department joined in on a whistleblower lawsuit against Toledo, Ohio-based HCR ManorCare, which operates more than 250 skilled nursing facilities nationwide. Authorities say the chain fraudulently overbilled Medicare for millions of dollars.

Last month, though, a federal judge excoriated the government for its handling of the case and ruled a key witness lacked credibility and lied in a deposition.

The government later indicated it would dismiss the case and a hearing scheduled for Thursday was canceled.

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The company issued a statement on Thursday saying it had been vindicated.