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Sidley False Claims Act Blog National nursing home initiative gains momentum under FCA

In March 2020, the DOJ implemented the National Nursing Home Initiative (“the Initiative”) to coordinate and strengthen civil and criminal efforts to prosecute nursing homes that allegedly provide substandard care to their residents. The DOJ noted in its announcement of the Initiative that she had already begun surveying about 30 nursing facilities in nine states. However, since that announcement, DOJ FCA activity on this project has been limited. But earlier this week, DOJ announcement the filing of one of its first CAF complaints resulting from an investigation launched under the Initiative. This case also comes in the wake of the White House decision announcement earlier this year new initiatives by CMS to improve the quality of care in nursing homes. In light of DOJ and White House priorities in this space, this complaint may reflect the DOJ’s intent to increase its use of the FCA to monitor the quality of care in nursing homes.

The DOJ complaint alleges that the American Health Foundation (“AHF”), its affiliate AHF Management Corporation, and three affiliated nursing homes provided substantially substandard skilled nursing services, in the form of “deficiencies in general care”, dirty physical facilities, inability to achieve infection control or provide sufficient mental health services, inadequate staff and provision of unnecessary medication.

This complaint serves as yet another wake-up call to vendors that the DOJ will continue to use the data both to identify targets for investigation and to support its theories of liability under the FCA (as discussed below). here). Especially:

  • General care gaps: The complaint alleges that one of the facilities was “an outlier on several CMS quality metrics, which are metrics that CMS has identified as potentially useful in evaluating nursing home performance.” According to the DOJ, the institution had access to its quality scores through CMS reports and could have determined that this was an outlier.
  • Recruitment: The complaint alleges widespread staffing shortages and inadequacies at all three institutions. Although federal regulations currently do not impose any specific minimum personnel requirements, the White House earlier this year called on CMS to develop and implement such standards. Without being able to point to specific staffing ratios that were violated, the DOJ focused on circumstantial evidence of inadequate staffing, such as internal emails complaining of staffing shortages and low relative CMS ratings. facility staffing levels.
  • Prescription drugs: The complaint describes how a facility allegedly administered unnecessary prescription drugs to residents, specifically antipsychotic, anxiolytic and hypnotic drugs. The DOJ criticized the facility for allegedly receiving reports from an outside consultant pharmacist that the facility was dispensing these drugs at two to three times the state average rate, yet without materially changing its practices. The DOJ’s emphasis on appropriate prescribing is also consistent with the White House Nursing Home’s announcement, which said “CMS will launch a new effort to identify problematic diagnoses and refocus efforts to continue reduce the inappropriate use of antipsychotic medications”.

The DOJ further alleged that the significantly substandard care provided by nursing facilities was a consequence of the corporate environment created by the management company. According to the complaint, AHF, acting through AHF management, exercised extensive control over skilled nursing facilities as it made budget decisions, selected facility management, certified financial records, maintained possession of facility financial records, signed tax returns, established care policies and protocols. , setting rates of pay, overseeing union negotiations and approving plans to address gaps in care. Additionally, the management company was supposed to be aware of at least some of the quality of care issues, but failed to address them. In particular, the DOJ alleges that “facility staff reported issues internally to facility managers, who in turn often alerted executives and key individuals in AHF and facility management. In addition, AHF management personnel periodically visited the facilities to perform their own inspections and report the results to facility managers and AHF and AHF management executives. As such, the DOJ says the AHF and AHF leadership should also be held accountable along with nursing facilities.

A copy of the DOJ complaint is available here.


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