Jury Awards $29 Million Against Nursing Home for False Claims Act Violations

An Illinois jury hit a skilled nursing facility (SNF) with a $29 million verdict after agreeing with allegations by former employees that the SNF knowingly provided worthless services to its residents and submitted over 1700 false claims to the government for their care.  The jury found that the government suffered losses of over $3 million in connection with the false claims, which are trebled—or multiplied by three— under the False Claims Act.  For each of the 1700-plus false claims, the jury awarded the maximum civil penalty of $11,000.  The jury also awarded the two former employee whistleblowers a total of over $400,000 in damages. 

The case was filed by two nurses who had worked at the SNF and alleged that they had repeatedly complained to management about the poor care provided to residents and of violations of the False Claims Act.  Among other allegations, the two whistleblowers said in their complaint that residents routinely went without medical care and food as well as the prescribed medications needed for their mental and physical well-being and to alleviate pain.  In addition, the whistleblowers alleged that the SNF destroyed and forged records in order to make it appear that residents received appropriate care, instructed staff to either not enter negative information or alter entries regarding negative aspects of patient care, and forged staffing sheets to conceal inadequate staffing at the facility.

While this case presents an extreme example, it also highlights the importance of responding promptly to employee complaints of potential False Claims Act violations.  As we wrote last month, federal law requires nursing facilities and skilled nursing facilities to have in place robust compliance programs by March 23, 2013.  A compliance program containing the elements required by this law would include mechanisms for responding to internal complaints like those made by the whistleblowers in this case.

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Obamacare Imposes New Compliance Program Requirements for Nursing Facilities

Under the Patient Protection and Affordable Care Act of 2010 (PPACA), also known as Obamacare, all nursing facilities and skilled nursing facilities must have a compliance and ethics program that contains certain statutorily-required elements by March 23, 2013. The program must be effective in preventing and detecting criminal, civil, and administrative violations under PPACA and in promoting quality of care.  Please click here to read the full article.

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OSHA to Target Nursing Homes and Residential Care Facilities with Programmed Inspections

OSHA recently announced a new enforcement program targeting nursing home and residential care facilities.  The program, effective a week-and-a-half ago, focuses OSHA compliance officers on inspecting nursing homes and assisted living facilities.  More info. is available on Jackson Lewis’ OSHA Law Blog at the following link: http://www.oshalawblog.com/

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Labor Board Considering Change to Long-Term Care Bargaining Units to Promote Unionization

In a move seen to make union organizing easier, the National Labor Relations Board has signaled it may be changing its  standards for long-term healthcare bargaining units so that narrow groups of nursing and assisted living facility employees can be approved for NLRB elections and collective bargaining.  It has invited interested parties to file amicus briefs by February 22, 2011.  All submissions must be e-filed at http://mynlrb.nlrb.gov/efile.

The NLRB's announcement, approved by three of the four members, was made in a  case involving a  Mobile, Alabama,  nursing home. The union petitioned for a unit of all Certified Nursing Assistants (CNAs).  The employer argued that such a unit was too narrow and that the only appropriate unit would be one covering all nonprofessional service and maintenance employees. 

While the NLRB typically requires such a broader unit, in this case, the Regional Director found the union could carve out a unit limited to CNAs.  The employer appealed to the NLRB in Washington, D.C.

The  Board has invited comments on eight specific questions to help it decide whether the standards for determining long-term care units should be changed to encourage "employee free choice and collective bargaining in non-acute health care facilities." 

One question is  whether the NLRB should extend its acute care hospital rule to long-term care facilities.  The NLRB's 1989 "acute care rule" defined eight appropriate bargaining units in acute care hospitals.  Although the Board in 1989 said it would not apply these unit rules to long-term care providers , it now wants to revisit the idea, citing the "radical transformation" (its words) of the long-term care industry in the past 20 years. It noted that long-term care employees have demonstrated a "persistent interest" in union organizing with almost 3,000 petitions filed in the last decade.

Some of the NLRB's eight questions should raise concerns for long-term care providers. For example, one asks whether a unit comprised of a single job classification or "all employees performing the same job in a single facility" should be considered presumptively appropriate.  If the Board adopted such a "rule of interpretation ," employers could expect a proliferation of units, one for each job classification, i.e., one for CNAs, one for Activity Assistants, one for Dietary Aides, and so on.  Unions would carve a facility into small, easy-to-organize voting units. A long-term care provider might have to negotiate and administer six or more labor contracts, each with a different expiration date.

No matter what the changes may be, they can be expected to result in strict  interpretations that minimize unit litigation and expedite elections.  That will almost assuredly mean higher union win rates.

In opposition to the Board majority's position, Member Brian Hayes said the majority had overstepped its bounds. Its decision, he said, clearly represents broad rulemaking, without the "inconvenience" of complying with the various safeguards and review required by the Administrative Procedures Act.   Hayes predicted this move is a "prelude to what will likely result in the substantial increase of units in the non-acute healthcare industry...."

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