Long Term Care Facilities Are Our Future

Long Term CareIn 2013, according to the Department of Health and Human Services, 44.7 million people in the United States, one in 7 people, were over the age of 65. Seniors comprised 14.1% of the population, up 24.7% since 2003. By 2040, 21.7% of the population will be over the age of 65, and they will total 98 million by 2060. By 2050, the World Health Organization reports that the global population of seniors is projected to total 1.5 billion. By approximately 2018, the population above 65 will exceed the population below age 5 for the first time in the history of census data collection. That gap is expected to widen with fewer and fewer younger members of society to support and care for their senior family members. Combine these statistics with the medical issues related to living longer and the increasing work and family demands on caregivers and the formula is compelling when considering the demands that will be placed on the long term care industry. We are facing an enormous growth in services for the aging sector of our society.


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A Golden Ticket: The Effects of Long Term Care Regulations on False Claims Act Cases

On January 11, 2018, Judge Steven Merryday, United States District Court judge for the Middle District of Florida, vacated a False Claims Act (“FCA”) judgment for $350 million against 53 nursing facilities.1  The purported FCA violation was for failure to maintain comprehensive care plans and other documentation as required by Centers for Medicare and Medicaid Services (“CMS”) regulations. The whistleblower’s claim relied on the implied false certification theory endorsed by the U.S. Supreme Court in Escobar.2  What the whistleblower did not contemplate was Judge Merryday’s astute materiality and scienter analysis.  Importantly, Judge Merryday’s analysis illustrates a workaround for long term care facilities (“LTC”) facing FCA claims.


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A Trend in 2017: Use of the False Claims Act for Malpractice Cases in Long Term Care

Multi-million dollar settlements in False Claims Act (FCA) cases against long term care (LTC) facilities made headlines several times in 2017.  I have blogged several times on the FCA and could not allow this trend to go without comment.

We all know that the purpose of the FCA is to penalize government contractors that submit false claims for reimbursement to government programs.  The penalty is triggered when anyone “knowingly presents or causes to be presented a false or fraudulent claim for payment or approval” or “knowingly makes, uses or causes to be made or used a false record or statement material to get a false or fraudulent claim paid.” For LTC facilities, the opportunity for such false claims usually arises in reimbursements from Medicare or Medicaid for care not provided or for providing an unnecessary higher level of care to receive higher reimbursements.  How the FCA is being applied in LTC cases, which appears prominently in the 2017 settlements, is through its application as a malpractice regulator, rather than as the originally intended contract fraud gatekeeper.


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Long Term Care Employment Issues Arising in Med Mal Litigation

The patient care and employee/employer behavior crossroads can be a perilous journey when a medical malpractice claim is filed. Now, the facility’s HR practices are placed under the microscope to determine if and what was known about the offending employee from the time of hire to the reported incident and steps taken by the employer to correct and more.  Brian Inamine and Nancy Reynolds explored the interplay of employment issues for long term care facilities in a recent webinar – including abuse, medical diversion, med mal and more.  Click here to view the recording of the complimentary one-hour webinar on key issues and reminders on best practices and more.

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An Update on Granny Cams

Video MonitoringLong term care (“LTC”) facilities across the country are fortunate if they have not either received family requests to place cameras in their family member’s room or been presented with the results of video recordings.  Currently, Texas, New Mexico, Washington, Oklahoma, Utah and Illinois are states with legislation on video cameras in resident rooms.  The Departments of Health for Virginia and Maryland promulgated guidelines on camera use in resident rooms at the direction of their legislatures.  In the past few months, two more states have joined the chorus.

Over the summer of 2017, New Jersey’s Division of Consumer Affairs expanded its program that lends surveillance cameras to citizens for use in the homes of seniors to root out caregiver abuse.  The camera loan program was expanded for use in skilled nursing facilities.  Now, family members or responsible parties can obtain free video cameras for short term to gather evidence of resident abuse in LTC facilities.  The real problem with this program is that there are no use guidelines to prevent violations of privacy, which requires LTC facilities to step in with policies and procedures to protect residents.


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Risky Business – Skilled Nursing Facilities Under Attack

Have you ever read a brochure for a resort, college, or apartment complex and expected everything it said to be completely and totally accurate without any caveats?  In the Commonwealth of Pennsylvania, a chain skilled nursing facility is under attack for representations it made in its marketing materials.

In July of 2015, the Commonwealth of Pennsylvania, by its Office of Attorney General (“OAG”), filed a Petition for Injunctive Relief against Golden Gate National Senior Care, LLC’s Pennsylvania facilities (“Golden Gate”).  The OAG asserted a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa C.S.A. § 201-1, et seq., as well as claims for breach of contract and unjust enrichment.  More specifically, the OAG claimed that Golden Gate engaged in unfair and deceptive acts and practices towards Pennsylvania consumers and the Commonwealth of Pennsylvania by: (1) making chain-wide misrepresentations in marketing materials; (2) making facility-level misrepresentations in its marketing materials, resident assessments/care plans and billing statements, presenting misleading appearances during state inspections, and creating false records; (3) making misleading statements about the level of care that would be provided to residents; and (4) failing to provide basic care.


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H.R. 1215: National Tort Reform For Skilled Care

On June 28, 2017, the U.S. House of Representatives passed the Protecting Access to Care Act of 2017 (“Act”).  The purpose is essentially to engage in federal tort reform to lower recoveries against health care providers.  The Act applies to liability claims about diagnosis, assessment, prevention or treatments for disease or impairment rendered by health care providers and provided, in whole or in part, through federal programs, subsidies or tax benefits.

The Act places no limits on the economic recovery (monetary losses) and limits noneconomic damages (pain, suffering, anguish, disfigurement, etc.) to $250,000, regardless of the number of parties or claims.  Each defendant is obligated to pay a percentage of a recovery based on its responsibility for the plaintiff’s injuries, requiring the jury to decide each defendant’s level of responsibility.  Significantly, the Act does not preempt any state laws that specify a monetary amount for economic or noneconomic damages.  For example, the Virginia Medical Malpractice Act setting forth maximum recovery amounts based on the year in which the malpractice occurred will not be affected by the Act. In addition, applying a sliding scale based on the amount of a recovery, the Act limits the amounts plaintiffs’ attorneys can be paid on a contingent fee basis.  The attorney fee limit applies to judgments, settlements, and any form of alternative dispute resolution.

Two conditions must be met before filing a lawsuit.  The plaintiff must provide 90 days’ written notice of intention to file the lawsuit to the health care provider.  Also, the plaintiff must obtain an affidavit of merit from a health professional, who qualifies as an expert in the defendant’s practice, which states what the standard of care is, that the standard was breached by the defendant, what care should have been provided or excluded, how the breach caused the injuries and the list of records reviewed.  This affidavit must be filed with the initial complaint.


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Arbitration Agreements are Alive and Well

Anyone who follows this blog knows that I am an advocate for arbitration agreements because of the benefits they offer parties to a dispute.  They can streamline dispute resolution, reduce costs of resolution, make the process more predictable because the parties control the terms, and allow for confidentiality, all while allowing the complainant to have his or her day in court.

The availability of arbitration was initially jeopardized by the November 28, 2016 regulations from the Centers for Medicare and Medicaid Services (“CMS”), with its eleventh hour attempt to pass regulations prohibiting pre-dispute arbitration agreements in the skilled care setting.  Interestingly, those regulations were not the initially proposed regulations submitted for comment, which did not prohibit pre-dispute arbitration agreements.  On November 7, 2016, The United States District Court for the Northern District of Mississippi granted a preliminary injunction prohibiting enforcement of the November 28 regulation.  The court found that the regulation violated the Federal Arbitration Act (“FAA”) and that Congress did not grant CMS the authority to enact the regulation.  The court noted that the breadth of the regulation raised concerns about expansion of federal agency power, prompting separation of power concerns.  CMS appealed the injunction on January 5, 2017 to the United States Court of Appeal for the Fifth Circuit.  On June 2, 2017, CMS withdrew its appeal.  In the meantime, the U.S. Supreme Court has weighed in on yet another state court attempt to violate the FAA by prohibiting enforcement of arbitration agreements signed by skilled care residents’ attorneys-in-fact.


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False Claims Act: Employment Claims

This third blog on the False Claims Act is a wakeup call to long term care facilities and management companies (“LTCs”) in their training and employment practices.  It is well-known that LTCs have high employee turnover and difficulty finding applicants, especially for certified nursing assistants (“CNAs”).  In response, many LTCs operate in-house training programs to cultivate a pool of qualified CNAs for hiring.  Here’s the rub: LTCs can be sued under the False Claims Act (“FCA”) for providing services through unqualified or underqualified employees and seeking reimbursement for those services.

In the U.S. Supreme Court’s Universal Health Services, Inc. v. Escobar decision, the Court held that Medicaid reimbursement requests for psychiatric services that were not provided by a psychiatrist can qualify as false claims.[1]  The Court noted that false claims occurred when reimbursement requests were made because the medical facility impliedly certified that the conditions for reimbursement (services by qualified professionals) were satisfied.  If the false information was not revealed at the time of the reimbursement request and the information was material to the decision to reimburse, a viable False Claims Act case can be asserted.


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Employee Surveys: Survey Its Risks First

The long term care industry is known for high staff turnover, which can affect care.  Often, staff separation can burden the available employees with extra duties or shifts.  Residents bond with employees and mourn their separation.  In response to this phenomenon, facilities and management companies have been encouraged to implement employee satisfaction surveys, which raise numerous red flags with employment law defense attorneys.

Employers can use employee satisfaction surveys for a multitude of well-intentioned reasons:  to make employees feel heard, to identify areas that need improvement, and to simply improve communication.  A younger workforce that values their voice being heard, as well as the increased use of technology in the workplace, means the use of surveys as well as other means of obtaining employee feedback are on the rise. While surveys can improve employee retention and performance, surveys can also lead to expensive investigations and lawsuits when managed incorrectly. Not only can the questions posed sometimes give rise to claims, but the employer’s response to the information gathered or lack thereof, can be just as fraught with legal consequences.


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Fourth Circuit Punts the Statistical Sampling Issue Back to the Trial Court

The January 17, 2017 blog identified how the False Claims Act (FCA) can be used to secure significant recoveries by a statistical sampling method.   Statistical sampling is applied when a whistleblower claims that Medicare and Medicaid reimbursement requests are fraudulent.  The statistical sampling feature occurs when a few cases of reimbursements for either care not provided or care outside of the resident’s medical needs (the sampling) are applied to an entire skilled care chain.  This method allows plaintiffs to avoid proving whether each case of fraudulent reimbursement is indeed fraudulent.  Typically, the cases serving as the sample are the best cases, and the remaining, potentially, thousands of reimbursements may not be fraudulent in any aspect.  The unfairness of this approach is clear.

Statistical sampling was before the Fourth Circuit Court of Appeals in the case U.S.A. ex rel. Michaels v. Agape Senior Community. In February, the Fourth Circuit issued its ruling on whether a small sampling of false claims (reimbursement for hospice care and general inpatient services) can be applied across the board to all of the approximately 53,280 claims for reimbursement submitted by Agape’s South Carolina facilities.  The Fourth Circuit stated that the statistical sampling issue was not properly before it on interlocutory appeal and returned the issue to the trial court. 


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