In 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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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.
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.
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.
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.
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.
As the world knows, Tenth Circuit Court of Appeals Judge Neil Gorsuch is being considered for the vacancy on the United States Supreme Court created by the death of Justice Antonin Scalia. Judge Gorsuch is a conservative jurist who has opined on federal agencies overstepping their mandates. That perspective may be very helpful to an over-regulated industry, such as long term care. In October 2016, the long term care industry saw the Centers for Medicare and Medicaid Services (“CMS”) squeeze in a re-write of its regulations just before a change in administration. Some of those new regulations can be considered of questionable relevance to the mission of CMS, particularly the prohibition on pre-dispute arbitration.
The False Claims Act (FCA) allows a whistleblower, called a relator, to sue for false statements made in connection with requests for payment to the government. For long term care facilities (LTCs), this typically arises in the Medicare and Medicaid reimbursement context. The false claims could be submitting reimbursement requests for care not provided or care not required. A claim may also arise when valid reimbursement requests are made, but the facility certifies, when submitting the paperwork, that it has complied with all regulatory requirements and, in fact, it has not. Intent to defraud is not required, but the facility must have actual knowledge of the false claim or must have acted with deliberate ignorance of or reckless disregard for the truth or falsity.
In the December 5, 2016 
In Service Employees International Union v. Montecito Heights Healthcare & Wellness Centre, LP, Case No. 31-CA-129747, the NLRB ruled that a skilled nursing facility’s arbitration provision in its alternative dispute resolution (“ADR”) policy requiring its unionized employees to waive their right to bring class actions or to act concertedly violated federal labor law. If you are non-unionized, do not stop reading here because this ruling has the potential of being applied to non-union workplaces.
Corporate representative depositions (“CRD”) are creatures of federal and state rules permitting parties to lawsuits to take depositions of corporations, associations, organizations and government agencies. They have been used for decades in products liability cases, but are relative newcomers in long term care litigation. In this section of a two-part blog, I will address the technical aspects of CRDs. The second blog will cover defending against and conduct of CRDs.