On March 3, 2020, the Department of Justice (DOJ) launched a National Nursing Home Initiative to “coordinate and enhance civil and criminal efforts to pursue nursing homes and long-term care facilities that provide grossly substandard care to their residents.” The DOJ’s new initiative adds to its extensive efforts to combat elder abuse and financial fraud targeted at American seniors.
The National Nursing Home Initiative will focus on the “worst nursing homes around the country” and has already resulted in investigations of thirty individual nursing facilities in nine states. Nursing homes may find themselves in the initiative’s investigative crosshairs based on a failure to provide adequate clinical staff, failure to adhere to hygiene and infection control protocols, failure to provide enough food to their residents, the withholding of pain medication, and the use of physical or chemical restraints to sedate their residents.
According to remarks made by Attorney General Barr: “The initiative will bring to justice those owners and operators who put profits before patients, and it will help to ensure that the residents receive the care to which they are entitled.”
The Medicaid and Medicare programs pay billions of dollars each year to nursing facility operators for long-term care services. The DOJ pursues cases of fraud, waste, and abuse related to the provision of these services through criminal charges such as health care fraud, 18 U.S.C. § 1347, and through civil claims under the False Claims Act (FCA), 31 U.S.C. § 3729, et seq.
Civil cases brought against nursing facilities pursuant to the FCA, however, have hit roadblocks after the Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016). Lower court interpretations and application of the Supreme Court’s emphasis on the FCA’s “rigorous” materiality standard have presented challenges for the government and/or relators in nursing home cases based on allegations of substandard care. For example, in United States ex rel. Angela Ruckh v. Salus Rehabilitation, 304 F. Supp. 3d 1258 (M.D. Fla. 2018), a jury awarded plaintiffs nearly $350 million, having found that defendant nursing facility operator had failed to create, maintain, and follow comprehensive care plans for its Medicare and Medicaid residents, in violation of the FCA. State and federal regulations requiring such care plans notwithstanding, the district court for the Middle District of Florida vacated the jury’s verdict, concluding that the jury could not have reasonably found that the nursing facility’s failures were sufficiently tied to government payment decisions to be material. The case is currently on appeal before the 11th Circuit, where the plaintiffs, DOJ, and various other interested amici have argued that the 11th Circuit should reverse the district court on a finding it misapplied the FCA’s materiality standard. For its part, the DOJ argued that the district court’s decision reflected a “serious misunderstanding” of Escobar and, by extension, the FCA.
Although the DOJ may continue to face legal challenges in these cases, this is undoubtedly an area in which we can expect continued enforcement actions given the National Nursing Home Initiative and the DOJ’s broad efforts to crack down on elder fraud and abuse.
Derek Adams, a former trial attorney with the Department of Justice, Civil Fraud Section, is a partner in the firm’s Litigation and Government Investigations practice group and leads the firm’s False Claims Act defense practice. He can be reached at email@example.com or (202) 466-8960 if you have any questions.
Rosie Dawn Griffin is a senior associate in the firm’s Litigation and Government Investigations practice group and has years of experience working on False Claims Act matters. She can be reached at firstname.lastname@example.org or (202) 466-8960 if you have any questions.