A recent New York U.S. Dep’t of Justice (DOJ) whistleblower lawsuit is a sign of the times for government investigations of nursing homes and health care providers more broadly. Providers must be prepared and proactive to ensure regulatory compliance.
Given the amount of COVID-19 relief funding provided to health care providers, investigating potential fraud and abuse involving those funds is taking center stage, at least for the near term. HHS OIG staff have signaled that an enforcement priority is COVID-19 related funding abuse and misuse of provider relief funds. Presumably, mandated reports related to the provider relief fund will be used by the Gov’t in its audit and enforcement activities.
Last week, HHS issued a revised Notice of Reporting Requirements and Reporting Timelines for Recipients of Provider Relief Payments (click Notice for link to PDF). The reporting requirements have been expanded, among other things, to now include recipients of the Skilled Nursing Facility and Nursing Home Infection Control Distributions, see https://www.hhs.gov/about/news/2021/06/11/hhs-issues-revised-reporting-requirements-timeline-for-provider-relief-fund-recipients.html.
In addition to COVID-19 related enforcement efforts, Gov’t health care regulators continue to focus on False Claims Act (FCA) whistleblower Qui Tam suits, which are a major source of civil enforcement recovery dollars, estimated at over $2 billion in settlements and judgements for fiscal year 2020. Based on activity recently announced, there are no signs that such enforcement activity will slow down.
Medicare Rehabilitation Therapy Services
Among the areas where FCA activity continues to grow are fraud allegations against nursing home operators nationally, especially involving Medicare rehabilitation therapy services, although FCA investigations and lawsuits are also prevalent regarding other specialty services and substandard skilled nursing services. Below are some recent examples.
Georgia Settlement
In a recent DOJ Press Release, the DOJ announced an $11.2 million settlement by a Georgia nursing home operator to resolve allegations that it violated the FCA by causing its nursing homes to bill Medicare for rehab therapy services that were not medically necessary, in addition to allegations of substandard skilled nursing services provided, see
Such allegations are not uncommon; the Georgia complaint alleged that the nursing home operator utilized corporate-wide practices to exert significant pressure on its nursing homes to bill for excessive services by setting aggressive corporate targets for the highest Medicare reimbursement rates, including delaying the discharge of patients from its facilities, even though certain patients were medically ready to be discharged.
New York Investigation
Similar allegations were announced last week by the DOJ against a New York nursing home operator for over $129 million in purported Medicare fraud involving rehabilitation therapy services at eleven facilities over a nine-year period. Among the allegations were corporate practices that purportedly tracked patients who were approaching the 100-day limit compensable by Medicare and reporting such information to management and ownership daily in order to curb discharges and maximize Medicare reimbursement without consideration of patients’ medical needs.
The whistleblower in the New York case is a company that apparently utilized data analytics and sophisticated mathematical computer models to analyze publicly available Medicare claims information; the company found what it considered excessive billings by the operator that were outliers to its competitors.
Given the significant dollars at stake and the large percentages (between 15 and 30 percent) of recovery often available to whistleblowers who initiate such FCA lawsuits, it is likely that such litigation will continue to be brought against health care providers. While these cases are often settled without admission of guilt by the defendant(s) and are, in some instances, based on incorrect law, facts or theories, the cost of defending against these allegations is enormous and therefore requires a sophisticated team of heath care defense counsel experienced in defending against FCA allegations and especially in the complicated nuances of Medicare and Medicare reimbursement and coverage principles.
Note that these whistleblower lawsuits are generally filed under seal with the court and the DOJ is given significant time (often many years) to investigate the whistleblower allegations before deciding whether to intervene in the case. There are often signs of an ongoing investigation such as the receipt of a subpoena for documents or other civil investigative demand.
As we continue to monitor health care investigations and FCA cases in the health care industry, we are available to discuss any concerns you may have regarding compliance, including billing and reimbursement structure, or if you believe that there may be a potential or ongoing investigation regarding your facility.