Home health aides who deceived their employer about their intention to strike created a reasonably foreseeable risk of imminent danger to their patients and were not entitled to be reinstated to their original patients and schedules after they were given new assignments following the strike, the U.S. Court of Appeals for the Second Circuit has ruled. NLRB v. Special Touch Home Care Servs., Inc., No. 11-3147-ag (2d Cir. Feb. 27, 2013).   For details, click here.

The Department of Justice has announced a $2.3 million settlement for alleged double billing violations of the False Claims Act.  According to the DOJ press release, a children’s genetic services clinic agreed to pay $1.5 million and a radiology group that read and interpreted genetic ultrasounds for the clinic agreed to pay an additional $800,000 to settle the alleged FCA violations. The settlement resolved a qui tam case brought by the radiology group’s former revenue manager and coding compliance officer under the FCA. 

At issue in the DOJ case was alleged double billing for reading and interpreting genetic ultrasounds.  The clinic and the radiology group had an understanding that the clinic would bill and receive payment solely for the “technical component” of this service while the radiology group would bill and receive payment solely for the “professional component.”  Notwithstanding this understanding, the clinic allegedly was billing and receiving payment for both the technical and the professional components.  According to the allegations, the radiology group discovered this double billing and brought it to the clinic’s attention.  The clinic denied that it billed for the professional component, except in a few accidental and isolated instances, and instructed the radiology group to continue to bill for the professional component.

According to the DOJ release, the radiology group continued to do just that, accepting the clinic’s apparent misrepresentation that it was not billing for that component even though there was evidence the clinic continued to bill for the same professional component for which the radiology group was billing. 

Lesson Learned: Turning a blind eye to suspected fraudulent billing in a business arrangement between providers can have serious consequences even if an organization is billing only for services it actually rendered. In the fiscal year that ended on September 30, 2012, the DOJ secured $4.9 billion in FCA settlements and civil judgments. Organizations should consider consulting legal counsel if an employee or business partner reports a FCA violation or they suspect a FCA violation.

An RN on FMLA leave lawfully was discharged from her position at Detroit Medical Center when her employer discovered she had misrepresented her alleged medical condition in her FMLA leave request, a federal district court has determined. Lineberry v. Detroit Medical Center, et al., Case No. 11-13752 (E.D. Mich., S.D. Feb. 5, 2013). Although the RN claimed she could walk and stand only for limited periods and, thus, required FMLA leave, her coworkers discovered Facebook photos that told a different story. The RN’s Facebook posts, which were discovered by her coworkers and reported up the chain, included photos of the RN’s Mexico vacation, photos of the RN standing and holding her infant grandchildren, one in each arm, and other photos and postings that suggested she had misrepresented her need for leave. Although the trip was pre-approved by her supervisor, the RN initially told her supervisor she used wheelchairs in all airports. When she was reminded by the employer that airports have cameras, she admitted she had lied and further admitted she never used a wheelchair during her trip. She was terminated.

The RN filed suit alleging the Medical Center violated her FMLA rights by denying her right to reinstatement and retaliating against her for having taken FMLA leave. In granting the Medical Center’s motion for summary judgment, the District Court explained that the undisputed evidence supported the fact that she had been terminated for dishonesty, not for taking FMLA leave.

Although employers should exercise caution when terminating an employee during FMLA leave, Lineberry is an example of an employer lawfully discharging an employee based on undisputed evidence the employee has been dishonest as to the basis for her need for leave.

A resolution adopted by the Nurse Alliance Leadership Council of SEIU Healthcare opposing mandatory flu vaccine and masking policies may add another challenge to healthcare employers seeking to implement such requirements.  Other unions representing healthcare workers have taken similar positions.  This opposition from labor unions is at odds with the efforts of regulators in many states to increase the percentage of healthcare workers who receive the flu vaccine.  For example, in Massachusetts, the Department of Public Health set a 90% flu vaccination coverage rate as the target for acute care hospitals during the 2012-2013 flu season. 

The SEIU has also filed a lawsuit in federal court challenging the state of Rhode Island’s requirement that healthcare workers be vaccinated.  (While many states require hospitals to offer flu vaccines to their employees, only Rhode Island requires that healthcare workers be vaccinated.) 

Mandatory flu vaccination and masking programs have also been the subject of recent litigation regarding religious accommodations and employer bargaining obligations under the National Labor Relations Act.  In addition, the EEOC has recently weighed in on employers’ rights to make reasonable inquiries about an employee’s religious beliefs when the employee objects to the vaccination on religious grounds.  These programs can also raise accommodation issues under state and federal disability discrimination laws.  The SEIU’s opposition to mandatory flu vaccination and masking programs for healthcare workers is one more issue for employers to address when developing these programs. 

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.

The U.S. Court of Appeals for the District of Columbia Circuit has ruled in Noel Canning v. NLRB et al., Nos. 12-1115 and 12-1153 (D.C. Cir. Jan. 25, 2013), that President Obama’s “Recess Appointments” of three new NLRB members in January 2012 were unconstitutional and, as a result, the Board lacked any constitutional authority to act since that time.   For details of that decision, click here. 

Noel Canning will likely be appealed to the U.S. Supreme Court.  However, for those Board rulings that have been issued since January 4, 2012, like Banner Health System d/b/a Banner Estrella Med. Ctr., 358 NLRB 93 (July 30, 2012), there is a strong argument that they are similarly invalid.  In Banner Health System, the Board ruled an Arizona hospital violated the NLRA when its human resources consultant asked employees interviewed in connection with an internal investigation not to discuss the matter with co-workers while the investigation was ongoing.  The Board found that the employer’s “generalized concern” regarding the need to protect the integrity of its investigation was insufficient to outweigh employees’ Section 7 rights.  Instead, the Board explained it was “the [employer’s] burden to first determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, or there [was] a need to prevent a cover up.”  The Board then determined that, in applying a “blanket approach” to maintaining confidentiality with respect to the internal investigation, the employer did not meet the requirement of evaluating whether an actual threat to the integrity of the investigation existed to justify the need for such confidentiality.   

Check back for additional postings on the status of Noel Canning, Banner Health System and best practices for handling internal investigations in the healthcare industry.  Employers seeking to raise a Noel Canning defense to existing unfair labor practice charges should carefully review the issue with legal counsel.

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.

The U.S. Department of Labor reportedly has recouped $2.1 million dollars in back wages as a result of an ongoing enforcement initiative which, to date, involved investigation of 200 residential care facilities within the jurisdiction of its North Carolina District Office.  The DOL reported finding “widespread violations” of the Fair Labor Standards Act minimum wage, overtime, and record-keeping provisions.  It described “common” violations such as: failure to pay for work performed outside an employee’s scheduled shift; failure to pay employees for time spent attending staff meetings and trainings; deducting eight-hour sleep periods from shifts of fewer than 24 hours; improper deductions from wages, to name a few.   Although the DOL’s initiative is, for now, focused upon residential care facilities in North Carolina, it may implement similar initiatives to enforce the federal law nationwide. 

The “common” violations identified by the USDOL are not unique to residential care facilities and could be occurring in other sectors of the health care industry such as hospitals and physician offices.  To aid health care employers (and to educate health care employees) the DOL has published a fact sheet (available here) explaining the FLSA and its implications.  As part of its enhanced enforcement program, the DOL developed a smart phone app to help employees track hours they work.  Thus, for off-the-clock and “written off work hours” cases, employees will be able to rely on their own records, not just the employers’ records.  As the old adage goes, an ounce of prevention is worth a pound of cure.  Understanding and properly applying the FLSA, applicable state labor laws and wage regulations is critical to avoiding not only DOL penalties but even more costly class and collective action litigation.  Jackson Lewis attorneys are available to help residential care facilities and other providers draft new policies and/or ensure their existing policies are in compliance.