BOOM! Aging Baby Boomers are Set to Cause an Explosion in Government Enforcement and Health Care Fraud and Abuse Investigations of Skilled Nursing Facilities

Print Friendly

By  Daniel C. LaPenta, Esq.

IIntroduction

Seventy years ago, the greatest generation stormed the beaches of Normandy and planted an American flag atop Iwo Jima’s Mount Suribachi.  Stateside, the greatest generation supplied the boats, bullets, and beans necessary for success.  In the twenty years that followed, the greatest generation spawned the “baby boomers,” who now present perhaps our nation’s greatest challenge:  taking care of them.  It is ironic that the most vulnerable among us are the sons and daughters of a generation that endured the Great Depression, defeated Nazism, and laid the groundwork for American’s economic surge.  Attendant to that vulnerability is a health care system trying to care for them, profiteers ready to exploit them, and the government attempting to protect them.

This triad of players involved in health care for the elderly naturally implicates Medicare reimbursement for the services of skilled nursing facilities (SNFs).[i]  With the rise of government spending on Medicare to meet the demands of the aging and retiring baby boomers, there is more opportunity for innocent errors, pervasive abuse, and outright fraud.  The government will try to curb the waste of the tax dollar through increased oversight and enforcement.  Trends since the passage of the Affordable Care Act (ACA)[ii] show that oversight of SNFs is a government priority.  Recent enforcement actions display that reality with no signs of slowing.  In particular, there appears to be a focus on the “quality of care” that SNFs must (statutorily) give to their residents.  This will increase the compliance risk for the future of SNFs, exposing them to greater civil and even criminal penalties.

 II. Around the World Three Times: The Baby Boomers in Numbers

The United States Census Bureau defines “baby boomers” as those born between mid-1946 and mid-1964.[iii]  Baby boomers therefore started to turn 65 (and become eligible for Medicare) in 2011.[iv]  In fact, from 2000 to 2010, the percentage of people over 65 increased to 15.1 percent of the population, while the rest of the population increased by 9.7 percent.[v]  By sheer numbers, the 2010 census reported 40,267,984 people over 65.[vi]  By 2030 (one year after the last baby boomer turns 65), there will be about 72,774,000 people over 65.[vii]  The statistical adage is that 10,000 baby boomers will retire every day until 2029.[viii]

To illustrate further, a Bill Bryson-type comparison is appropriate.[ix]  Consider, for example, that an average person over 60 (combining the sexes) is 65.4 inches tall.[x]  Today, if they all laid down head-to-feet around the globe, they would make it around one and two-thirds times.[xi]  Unnerving as that may sound, in 2030 they would lap the planet nearly three times.[xii]

The bottom line is that as the numbers of retired baby boomers increase, demand for their care will rise.  The growth of SNFs is therefore an important piece.  Although the percentage of nursing homes actually decreased by 3.2 percent from 2004 to 2008, that rate of decline slowed to only 0.7 percent from 2008 to 2012.[xiii]  That change suggests an increase might be on the horizon, while it is already the case in many states.[xiv]  Indeed, increased competition between SNFs and other platforms that offer elder care like assisted living facilities or Accountable Care Organizations can challenge the notion that SNF reimbursement—and therefore oversight and enforcement—will boom along with the number of retirees.  The limitation on stays at, and Medicare payments to, SNFs will likely draw some attention to those other areas.[xv]  Any means of Medicare reimbursement will face government scrutiny.  But the increase in raw numbers of the elderly over the next twenty years will surely require more beds at SNFs.  And with more (filled) beds, there will be more opportunities for Medicare reimbursement, abuse and fraud, and thus oversight and enforcement.  The trend has already begun and congressional action and enforcement initiatives make a reversal unlikely.

III.  Enter Congress:  Focus on SNFs and “Quality of Care”

 A. Relevant Statutes

Congress defines a SNF as an institution that “is primarily engaged in providing to residents (A) skilled nursing care and related services . . . or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons.”[xvi]  In March of 2010, Congress passed the ACA, within which SNFs receive particular attention, including “accountability requirements.”[xvii]

Notably, under this section is the directive for SNFs to maintain a “compliance and ethics program” that “has been reasonably designed, implemented, and enforced so that it generally will be effective in preventing and detecting criminal, civil, and administrative violations . . . and in promoting quality of care.”[xviii]  Notwithstanding the loose, defense-lawyer-friendly terms in that provision, the statue requires that SNFs “have established compliance standards,” beef up training, conduct internal audits, and discipline violators.[xix]  The “discipline” section even requires, under an internal, quasi-Park doctrine,[xx] punishment “as appropriate” for “individuals responsible for the failure to detect an offense.”[xxi]  Also under the “accountability requirements,” Congress added that SNFs must submit staffing reports to the Secretary of Health and Human Services (HHS).[xxii]  Other provisions echo the emphasis on staffing and statutorily require that SNFs “provide 24-hour licensed nursing service which is sufficient to meet nursing needs of its residents and must use the services of a registered professional nurse at least 8 consecutive hours a day, 7 days a week.”[xxiii] Further, CMS requires SNFs to have compliance programs in place by March 23, 2013,[xxiv] but it has yet to issue regulations for such programs.  This is despite a March 23, 2012 statutory deadline, requiring that CMS “shall promulgate regulations for an effective compliance and ethics program for operating organizations, which may include a model compliance program.”[xxv]

The failure of CMS to promulgate guiding regulations, however, will not excuse SNFs from developing a compliance program.  In the meantime, SNFs should continue to use the existing OIG Program Guidance for Nursing Facilities, particularly, the following OIG-recommended “Seven Basic Compliance Elements”:[xxvi]

  1. The development of written policies and procedures to include standards of conduct that promote a facility’s commitment to compliance;
  2. The designation of a compliance officer or other appropriate body, e.g., a compliance committee;
  3. The development of training and education programs;
  4. The development and maintenance of open lines of communication between the compliance officer and employees, e.g., a reporting system that protects complainants;
  5. The development and use of internal auditing and monitoring;
  6. The enforcement of disciplinary standards; and
  7. The development of policies and procedures addressing the response and correction of detected offenses or deficiencies.

Owners and operators of SNFs will find other statutory requirements to maintain the “highest practicable physical, mental, and psychological well-being of each resident.”[xxvii]  Certain statutory provisions and regulations provide the framework for regulators to address and punish “substandard quality of care.”[xxviii]  This measure exists when a SNF reaches a certain threshold under federal regulations that govern “Resident Behavior and Facility Practices,” “Quality of Life,” and “Quality of Care.”[xxix]  Governments make these determinations through state surveys[xxx] and a detailed point system to “score” the risk of harm to residents.[xxxi]  In February of 2015, CMS released its updated “Five Star Quality Rating System.”[xxxii]  Along with this release, CMS announced that “CMS standards for performance on quality measures are increasing, [so] many nursing homes will see a decline in their quality measures star rating.”[xxxiii]  In particular, the rating system altered its calculation for adequate staffing levels, increasing the burden on facilities to maintain compliance and avoid an unfavorable rating.[xxxiv]

Ultimately, states must certify the compliance of SNFs, ensuring that they provide adequate services, protect residents’ rights, and conduct their general administration appropriately.[xxxv]  If they do not meet the statutory requirements, SNFs may be subject to civil monetary penalties, up to $10,000 for each day of noncompliance.[xxxvi]  The emphasis on “quality of care” provides broad discretion for regulators to combat and recover money from health care.  Even as early as 2008, the OIG in its Supplemental Program Guidance for Nursing Facilities remarked that the increase in population of older Americans will put SNFs at risk for the “target of government investigations” if they “fail to make quality a priority.”[xxxvii]  The OIG emphasized that the Federal False Claims Act (FCA) and the Civil Monetary Penalties Law will increasingly address quality-of-care standards.[xxxviii]  The review below of recent enforcement actions and settlements shows that the government is following through on its warnings.

B. “Because that’s where the money is.”

Willie Sutton was a famous bank robber in the 1920s and 1930s (who also had a taste for lavish clothes).[xxxix]  Later in life, when a reporter (supposedly) asked Sutton why he robbed all of those banks, he simply said, “Because that’s where the money is.”[xl]  Although he later denied making that quip, the folklore has endured.  Regardless, Sutton still agreed with the underlying principle when he wrote in his autobiography, “Go where the money is . . . and go there often.”[xli]

This simple concept—now taught in medical schools as “Suttons Law,” which states that during diagnosis, the physician should first consider the obvious—applies to health care fraud and abuse as well.  It is inevitable that profiteers have incentive to abuse and defraud the system by sheer volume-based opportunity for Medicare reimbursement.  In addition to money in Medicare, enforcement initiatives to combat health care fraud and abuse show that SNFs will face scrutiny for decades.  Further, despite the Department of Justice (DOJ) and regulators’ noble efforts of general deterrence through increased enforcement, the sheer numbers of baby boomers entering the system will create such an increased reimbursement opportunity that the cycle of fraud, abuse, and subsequent enforcement will persist.

1. Funding Health Care Fraud and Abuse Enforcement Initiatives

There are several examples of appropriations and initiatives for combating health care fraud, both generally and also more specifically to SNFs.  More broadly, the Health Care Fraud and Abuse Control Account (HCFAC) has its origins in the Health Insurance Portability and Accountability Act, which created the Health Care Fraud and Abuse Control Program.[xlii]  In fiscal year (FY) 2014, there was $1.264 billion in mandatory funding for the HCFAC, whereas the President’s proposed budget for FY 2015, albeit under an unclear budgetary future, would increase that funding level to $1.7 billion.[xliii]  The ACA also tied the yearly increases to the HCFAC to the consumer price index for all urban consumers.[xliv]  These increases will fund HHS and DOJ, including specific allocations to the FBI for the express purposes of operating the Health Care Fraud and Abuse Control Program that Congress designed to investigate, inspect, audit, and prosecute health care matters.[xlv]

Congress has directed other funding toward long-term care and nursing facilities, demonstrating the government’s goal to root out fraud and abuse in those spaces.  The following are several examples:

  • HHS will make state grants to agencies that perform surveys of SNFs, giving states incentive to scrutinize compliance requirements.[xlvi]
  • Congress requires HHS, after consultation with the Attorney General, to make grants available “to establish and operate stationary and mobile forensic centers, to develop forensic expertise regarding, and provide services relating to, elder abuse, neglect, and exploitation.”[xlvii]
  • In FY 2013, the Civil Division of the United States Attorney’s office received approximately $28 million in HCFAC funding, which included allocations to support the DOJ’s Elder Justice and Nursing Home Initiative.[xlviii] This program, in part, provides the structure for DOJ attorneys and Assistant United States Attorneys to coordinate investigations of SNFs.[xlix]
  • Congress appropriated $12,000,000 for the period of FYs 2011-2014 to conduct a “national study of the cost to state agencies of conducting complaint investigations of skilled nursing facilities.”[l]
  • In 2014, Congress amended the ACA and authorized $11,000,000 (available on October 6, 2014) for the development of the “Nursing Home Compare” website.[li] In part, the website must display “staffing data” for each facility, links to State websites that include survey information, information about substantiated complaints, and the number of adjudicated instances of criminal violations of the facility or its employees, as well as any civil monetary penalties against the facility.[lii]

Additionally, the Office of Inspector General Fiscal Year 2015 Work Plan emphasized that, for Medicare Part A and B, “quality of care,” “appropriate payments,” and “oversight of payment and delivery reform” will be a focus of the department.[liii]  Although the OIG did not outline any specific enforcement initiatives for SNFs, it expects—in 2015—to complete and release an evaluation of SNF billing practices from FYs 2011 to 2013.[liv]  It will therefore be important to watch for this analysis and any resulting initiatives.

The above funding initiatives and the OIG Work Plan reflect continued government attention to SNFs concomitant with new avenues for residents to allege fraud or abuse.  They also show that appropriations set aside to understand and investigate the operations of SNFs will underscore the “quality of care,” including staffing levels.  However, Medicare is ultimately “where the money is.”

 2. The Medicare Pot

Medicare spending is set to increase over time.  Indeed, over the last few years, the Centers for Medicare and Medicaid Services (CMS) reports that Medicare spending growth has slowed and, in 2015, will continue to slow to a growth rate of 2.7 percent.  But for years 2016 through 2023, CMS projects that Medicare will grow at a rate of 7.3 percent per year, courtesy of the baby boomers enrollment, increased utilization of care, and higher payment rates.[lv]  While Medicare gross spending in 2013 was $591 billion, the Congressional Budget Office projects that Medicare spending will be over one trillion dollars in 2023.[lvi]

This pot of money (according to Sutton’s Law) represents the obvious opportunity for abusers and fraudsters to exploit the elderly and the system that tries to treat them.  And as SNFs are an increasingly integral part of that system, they will face greater scrutiny of their care and reimbursement practices.

IV. Data or Anecdotes: The Proof is in the Press Releases

Health care fraud enforcement continues to be a DOJ priority with no end in sight.  For general data points, the DOJ touted that, during FY 2013, it had opened 1,013 new criminal health care fraud investigations involving 1,910 potential defendants; it also had opened 1,083 new civil health care fraud investigations.[lvii]

This national emphasis on health care fraud investigations translates specifically to SNFs.  In the Health Care Fraud and Abuse Program Annual Report for FY 2013, HHS and DOJ related that Medicare paid about $5.1 billion for stays at SNFs that failed to meet “quality-of-care requirements.”[lviii]  The report noted that reviewers found examples of poor quality of care related to wound care, medication management, and therapy.[lix]  One of HHS and OIG’s recommendations was that CMS strengthen its regulations on care planning.[lx]

As Medicare claims increase with the number of elderly, the FCA[lxi] will continue to be the government’s auspicious enforcement tool.  Still, these historical claims noted above—$5.1 billion’s worth—involved scrutinizing “quality of care.”[lxii]  This is interesting because in years 2008 through 2012, the number of surveys of nursing homes resulting in citations for “substandard quality of care” actually decreased by almost a third (from 4.4 percent to 3.1 percent of all facilities, regardless of bed-size category).[lxiii]  While one reading of these figures might suggest that the added scrutiny is working, recent settlements and public statements of prosecutors indicate persistent, heavy emphasis on quality-of-care failures.  Of course, improvement and enforcement do not have to follow the same curve.

Other enforcement actions anecdotally tell a similar story of a government crackdown on allegations of “substandard care.”  In the few years preceding 2012, several investigations of nursing homes and their employees, owners, or operators resulted in criminal prosecution or civil sanction.[lxiv]  A reoccurring theme involved inadequate or substandard care in the form of bed sores, wound care, inadequate nutrition, patient neglect, lack of a care plan, and generally poor quality of care.[lxv]  Inadequate staffing also appeared to be a factor for scrutiny.[lxvi]

In October of 2014, the quality-of-care category reached a historic level as the DOJ announced its largest ever FCA settlement—$38 million—that a SNF paid involving allegations of “failure of care.”  The government alleged that Extendicare, which operates 146 SNFs in eleven states, had provided inadequate staffing, had failed to give proper catheter care, and had neglected to follow protocol to prevent bed sores or falls.[lxvii]  The Acting Associate Attorney General, speaking about the settlement, stated the following and reinforced the notion that scrutiny of SNFs will persist:

[T]oday’s settlement reflects the department’s commitment to protecting the nation’s elderly and most vulnerable citizens from all forms of abuse, neglect, and financial exploitation.  Under this administration, the department has redoubled its efforts in the elder justice arena by funding innovative research, developing training materials for elder abuse prosecutors and legal services lawyers; and by raising public awareness.  In fact, just last month, the department launched its Elder Justice Website, a tremendous resource for prosecutors, practitioners, and most importantly, elder abuse victims and their families.

. . .  Given the growing Medicare eligible population, we must make every effort to protect Medicare funds from fraud, waste, and abuse.[lxviii]

This sentiment is not new.  The predecessor Acting Associate Attorney General advertised a similar goal a year earlier:

We are . . . pursuing long-term care providers who provide grossly substandard care to our Medicare and Medicaid beneficiaries.  As part of the Department’s Elder Justice and Nursing Home Initiative, the Department has brought many of these “failure of care” or “worthless services” cases against a number of providers, and we’ve obtained criminal convictions and civil settlements.[lxix]

These announcements show that SNFs are in the crosshairs of prosecutors’ efforts to ensure that SNFs provide the congressionally mandated “quality of care.”  Unfortunately, the true bad actors place a burden on all SNFs to meet the rigors and costs of the statutory and regulatory requirements.

  V. Courts’ Future Reaction to Government Enforcement 

With an increased focus on quality of care, it will be critical to follow federal jurisdictions’ reactions to FCA cases that SNFs decide to challenge.  A key question is whether more jurisdictions will adopt the “worthless service theory” of FCA liability.  Under this theory, a qui tam relator can allege violations of the FCA if the defendant received reimbursement for services that were “worthless.”[lxx]  The relator must prove that the service was “so deficient that for all practical purposes it [was] the equivalent of no performance at all.”[lxxi]  As a theory of FCA liability, only the Second, Sixth, Eighth, and Ninth Circuits have adopted it.[lxxii]  Recently, the Seventh Circuit declined to adopt the “worthless service theory” of liability (and distinguished “worthless service” from “diminished value” or services that are merely “worth less”), but accepted the principle that “truly worthless services” are evidence that a claim for reimbursement is false.[lxxiii]  Additionally, the Third Circuit appears to approve of the worthless services theory of FCA liability but has yet to formally adopt it.[lxxiv]

The U.S. Court of Appeals for the First Circuit has not addressed the issue.  But the U.S. District Court for the District of Massachusetts, in March of 2014, disfavored use of the False Claims Act to address “quality of care.”  In U.S. ex rel. Escobar v. Universal Health Servs., Inc., the court rejected the plaintiff’s claim under MassHealth (the Medicaid program in Massachusetts) that the defendant, Universal Health Services, failed to provide adequate supervision of clinicians and nurse practitioners at a mental health clinic so “must have submitted claims for reimbursement for services it did not perform.”[lxxv]  The court did acknowledge the existence of the “worthless services” theory by citing a sister court’s exposition of the principle.[lxxvi]  The District Judge in his concluding paragraph, however, distanced “quality of care” from the FCA and emphasized the requirement of actual falsity:

The allegations of this complaint raise serious questions about the quality of care provided to the Plaintiffs’ daughter.  But the False Claims Act is not the vehicle to explore those questions.  The Act and its Massachusetts analog are directed at materially false statements presented to obtain government reimbursement.  The Plaintiffs have not, despite three iterations of their complaint, made adequate allegations regarding such statements.[lxxvii]

So while SNFs in Massachusetts have some persuasive authority to avoid FCA liability for substandard quality-of-care allegations, increased enforcement because of a rise in reimbursement claims may give the government more opportunity to evolve the law in its favor.  Regardless, allegations of substandard care still expose SNFs to civil monetary penalties.[lxxviii]  In Massachusetts, for example, approximately 200 nursing homes in years 2011 through 2013 paid $2.69 million in fines for deficiencies. [lxxix]  During that same period, over 400 homes had deficiencies.[lxxx]  The average fine was $12,600, about $7,000 below the national average.[lxxxi]  These risks underscore the importance of an effective compliance program.

VI. Conclusion

There will always be fraudsters and thieves who prey on the elderly and exploit Medicare bureaucracy.  Now, more than ever, Medicare reimbursement provides the motive.  The baby boomers provide the opportunity.  Outside of the quality-of-care category, SNFs need to be wary, for example, of “patient recruiters” who dupe vulnerable residents to sign fabricated documents and agree to unnecessary services.[lxxxii]  Other risks will emerge through contracts with outside facilities that provide services, e.g., rehabilitation, for patients of SNFs.  The United States Attorney for the District of Massachusetts recently stated that in such circumstances, the SNF “remains responsible for ensuring that its patients are receiving, and Medicare is paying for, reasonable and necessary care.”[lxxxiii]

To deter and punish this more obvious fraud and abuse, the government will lean on the FCA and deploy its fleet of enforcers.  More subtly, however, SNFs must stay abreast of the increased government focus on the “quality of care” so that their operations can properly navigate through a motivated and well-funded government.  Sheer population growth of the elderly will present the greatest challenge for SNFs to meet the demand of more patients.  Adequate staffing—an apparent factor in government enforcement—will be critical to maintain as SNFs take on more baby boomers.  Initiatives to aid reporting and the education of seniors are noble but will create greater burdens on the SNFs to remain compliant.  Regulations that direct the requirements for SNFs seek to provide objective criteria, but SNFs will still face the rigors of caring for an aging population under the government’s watch.  Indeed, after the greatest generation gave extraordinary service to America, SNFs will attempt to serve their children’s health-care needs.  And while the government tries to thwart and punish the exploitation of both the baby boomers and the tax dollar, SNFs must brace for the next boom:  enforcement.

Daniel C. LaPenta, Esq. is an associate at LibbyHoopes, P.C., a boutique Boston law firm that specializes in white collar criminal defense, government investigations, and complex civil litigation.  Mr. LaPenta’s current practice focuses on the representation of individuals subject to government investigations, with particular attention to the health care industry.  Before he joined LibbyHoopes, Mr. LaPenta clerked for the Honorable Justice Mitchell J. Sikora, Jr. of the Massachusetts Appeals Court.  Mr. LaPenta also served for over five years in the United States Navy Judge Advocate General’s Corps as a trial and appellate defense attorney.  Mr. LaPenta received his law degree from New England School of Law where he was the Executive Literary Editor of the New England Law Review.  He received his undergraduate degree from Bates College. 

[i] While SNFs also clearly involve Medicaid, this article focuses on the issues attendant to Medicare spending and reimbursement.

[ii] The Affordable Care refers to the Patient Protection and Affordable Care Act, Pub. L. 111-148 (2010), enacted on March 23, 2010 and further amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152 (2010).  The ACA has been codified in various sections of Title 42 of the United States Code.

[iii] U.S. Census Bureau, Colby, Sandra L. and Jennifer M. Ortman, The Baby Boom Cohort
in the United States: 2012 to 2060 2 (May 2014), available at http://www.census.gov/prod/2014pubs/p25-1141.pdf.

[iv] Id. at 1; 42 U.S.C. §§ 1395i-2, 1395o.

[v] United States Census Bureau, 2010 Census Briefs, The Older Population:  2010 1-2 (Nov. 2011), available at http://www.census.gov/prod/cen2010/briefs/c2010br-09.pdf.  The percentage of people aged 70-74 grew only a rate of 5.7% during that period, while those aged 75-79 actually lost numbers by 1.3 percent.  Id.  This is attributable to the low birth rates in the 1920s and 1930s.  Id. at 4 n.4.

[vi] Id. at 1.  The South region appears to have the greatest numbers of people over 65, while the Northeast region has the greatest percentage of people 65 and over.  Id. at 8.

[vii] U.S. Census Bureau, Population Division, Projections of the Population by Selected Age Groups and Sex for the United States: 2015 to 2060 (Dec. 2012), available at http://www.census.gov/population/projections/data/national/2012/summarytables.html.

[viii] Pew Research Center, “Baby Boomers Retire” (Dec. 10, 2010), available at http://www.pewresearch.org/daily-number/baby-boomers-retire.

[ix] See generally, Bill Bryson, A Short History of Nearly Everything (Broadway Books 2003) (providing numerous examples of easy-to-comprehend comparisons relating to science).

[x] National Center for Health Statistics, Anthropometric Reference Data for Children and Adults:  United States, 2003–2006 14, 16 (Oct. 2008), available at http://www.cdc.gov/nchs/data/nhsr/nhsr010.pdf.

[xi] This calculation is based on multiplying the number of people over 60 in 2010 and 2030 by 65.4 inches to arrive at an aggregate length, which can then be converted into miles and divided by 24,901, which is the distance in miles around the circumference of the earth.  The National Center for Health Statistics, supra n.10, only included data in multiples of tens of years, which is why the age used in the calculation is 60 and not 65.

[xii] U.S. Census Bureau, Population Division, Projections of the Population by Selected Age Groups and Sex for the United States: 2015 to 2060 (December 2012), available at http://www.census.gov/population/projections/data/national/2012/summarytables.html.

[xiii] Centers for Medicare and Medicaid Services (CMS), Nursing Home Data Compendium 2013 1 (hereinafter, “Nursing Home Data Compendium”), available at, http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/Downloads/nursinghomedatacompendium_508.pdf.

[xiv] Id.

[xv] 42 U.S.C. § 1395d(a)-(b).

[xvi] 42 U.S.C. § 1395i-3(a).

[xvii] See, e.g., Pub. L. 111-148 §§ 6101-6302; 42 U.S.C. §§ 1395i-3, 1320a-7j.

[xviii] 42 U.S.C. § 1320a-7j(b)(1)-(2).

[xix] 42 U.S.C. § 1320a-7j(b)(4).

[xx] United States v. Park, 421 U.S. 658, 672-74 (1975) (permitting criminal liability for certain corporate officials who had a duty by virtue of their position in the corporation to “prevent” or at least “promptly correct” violations, even if they had no actual knowledge of the alleged violation).”

[xxi] 42 U.S.C. § 1320a-7j(b)(4)(F).

[xxii] 42 U.S.C. § 1320a-7j(g).

[xxiii] 42 U.S.C. § 1395i-3(b)(4)(C)(i).

[xxiv] 42 U.S.C. § 1320a-7j(b)(1).

[xxv] 42 U.S.C. § 1320a-7j(b)(2)(A).

[xxvi] OIG Compliance Program Guidance for Nursing Facilities, 65 Fed. Reg. 14289, 14291 (Mar. 16, 2000); see also OIG Supplemental Compliance Program Guidance for Nursing Facilities, 73 Fed. Reg. 56832, 56848 (Sept. 30, 2008).

[xxvii] 42 U.S.C. § 1395i-3(b)(2)(a).

[xxviii] Nursing Home Data Compendium 2013, supra n.13, at 3.

[xxix] 42 C.F.R. §§ 483.13, 483.15, 483.25; Nursing Home Data Compendium 2013, supra n.13, at 3.

[xxx] 42 C.F.R. § 483.1(b) (“The provisions in this part contain the requirements . . . to participate as a SNF in the Medicare Program . . . .  They serve as the basis for survey activities for the purpose of determining whether a facility meet the requirements for participation in Medicare . . . .”); see also CMS, State Operations Manual, Chapter 7, Survey and Enforcement Process for Skilled Nursing Facilities and Nursing Facilities (rev. 118, June 12, 2014), available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c07.pdf;

[xxxi] CMS, Design for Nursing Home Compare Five-Star Quality Rating System, Technical Users Guide 3-6 (Feb. 2015), available at http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/downloads/usersguide.pdf.

[xxxii] Id.

[xxxiii] Press Release, CMS, CMS Strengthens Five Star Quality Rating System for Nursing Homes, Feb. 20, 2015, available at http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-02-20-2.html.

[xxxiv] CMS, Design for Nursing Home Compare Five-Star Quality Rating System, Technical Users Guide 7-10 (Feb. 2015),  available at http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/downloads/usersguide.pdf.

[xxxv] 42 U.S.C. § 1395i-3(g)(1)(A).

[xxxvi] 42 U.S.C. § 1395i-3(h)(2)(B)(ii)(I).

[xxxvii] OIG Supplemental Compliance Program Guidance for Nursing Facilities 73 Fed. Reg. at 56836.

[xxxviii] Id.

[xxxix] Federal Bureau of Investigation, Famous Cases and Criminals:  Willie Sutton, available at http://www.fbi.gov/about-us/history/famous-cases/willie-sutton.

[xl] Id.

[xli] Willie Sutton & Edward Linn, Where the Money Was: The Memoirs of a Bank Robber 160 (Broadway Books 2004) (1976).

[xlii] 42 U.S.C. § 1395i(k); Pub. L. 104–191 § 201 (1996).

[xliii] CMS:  Program Integrity, available at http://www.hhs.gov/budget/fy2015-hhs-budget-in-brief/hhs-fy2015budget-in-brief-cms-program-integrity.html (last visited Feb. 24, 2015).

[xliv] The Department of Health and Human Services and The Department of Justice Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2013 3 (hereinafter “Health Care Fraud and Abuse Report”) (Feb. 2014), available at http://oig.hhs.gov/publications/docs/hcfac/FY2013-hcfac.pdf.

[xlv] 42 U.S.C. § 1395i(k)(3); see also 42 U.S.C. § 1395i(k)(7) (appropriating an additional $10,000,000 to the HCFAC for FYs 2011 through 2020 that “shall be available without further appropriation until expended”); 42 U.S.C. § 1395i(k)(8) (appropriating an additional $20,000,000 for each of FYs 2015 and 2016).

[xlvi] See 42 U.S.C. § 1395i-3a(2) (grants given to “State agencies that perform surveys of skilled nursing facilities . . . under . . . 42 U.S.C. 1395i-3 . . . .”).

[xlvii] 42 U.S.C. § 1397I.

[xlviii] Health Care Fraud and Abuse Report, supra n.44, at 88.

[xlix] Id. at 89.

[l] 42 U.S.C. §§ 1395i-3a(1)(B)(viii), 1395i-3a(1)(C).

[li] 42 U.S.C. § 1395i-3(i)(3).

[lii] 42 U.S.C. § 1395i-3(i)(1)(A).

[liii] Office of Inspector General Work Plan Fiscal Year 2015 1, available at http://oig.hhs.gov/reports-and-publications/archives/workplan/2015/FY15-Work-Plan.pdf.

[liv] Id. at 1, 7.

[lv] CMS, National Health Expenditures Projections 2013-2023 – Forecast Summary, available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2013.pdf (this figure assumes improved economic conditions).

[lvi] Congressional Budget Office, April 2014 Medicare Baseline Projection, available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44205-2014-04-Medicare.pdf.

[lvii] Press Release, HHS, Departments of Justice and Health and Human Services announce record-breaking recoveries resulting from joint efforts to combat health care fraud, Feb. 26, 2013, available at http://www.hhs.gov/news/press/2014pres/02/20140226a.html.

[lviii] Health Care Fraud and Abuse Report, supra n.44, at 58.

[lix] Id.

[lx] Id.

[lxi] 31 U.S.C. §§ 37293733.

[lxii] Id.

[lxiii] Nursing Home Data Compendium, supra n.13, at 115.

[lxiv] See The Rytes Company, Company News, Representative Recent Prosecutions of Nursing Homes and the Individuals that Own and Operate Them (July 16, 2012), available at http://rytescompany.com/268 (abstracting over fifty enforcement actions involving nursing homes).

[lxv] See id.

[lxvi] See id.

[lxvii] Press Release, DOJ, Extendicare Health Services Inc. Agrees to Pay $38 Million to Settle False Claims Act Allegations Relating to the Provision of Substandard Nursing Care and Medically Unnecessary Rehabilitation Therapy, Oct. 10, 2014, available at http://www.justice.gov/opa/pr/extendicare-health-services-inc-agrees-pay-38-million-settle-false-claims-act-allegations.

[lxviii] Acting Associate Attorney General Stuart F. Delery, Remarks at a press conference announcing False Claims Act resolution with Extendicare (Oct. 10, 2014), available at http://www.justice.gov/opa/speech/acting-associate-attorney-general-stuart-f-delery-delivers-remarks-press-conference; see also Acting Assistant Attorney General Stuart F. Delery, Keynote Address at the CBI Pharmaceutical Compliance Congress (Jan. 29, 2014), available at http://www.justice.gov/opa/speech/assistant-attorney-general-stuart-f-delery-delivers-keynote-address-cbi-pharmaceutical (“We are pursuing a broader range of health care fraud matters than ever before.  We have cracked down on elder abuse in nursing homes, bringing criminal and civil cases against companies that harm seniors by providing, grossly deficient care.”) (emphasis added).

[lxix] Acting Associate Attorney General Tony West, Remarks at the National Academy of Elder Law Attorneys 2013 Annual Conference (May 2, 2013), available at http://www.justice.gov/opa/speech/acting-associate-attorney-general-tony-west-speaks-national-academy-elder-law-attorneys.

[lxx] U.S. ex rel. Absher v. Momence Meadows Nursing Ctr., Inc., 764 F.3d 699, 709 (7th Cir. 2014).

[lxxi] Id. at 710.

[lxxii] Mikes v. Straus, 274 F.3d 687, 703 (2d Cir. 2001); Chesbrough v. VPA PC, 655 F.3d 461, 468–69 (6th Cir. 2011); United States ex rel. Roop v. Hypoguard USA Inc., 559 F.3d 818, 824 (8th Cir. 2009); and United States ex rel. Lee v. SmithKline Beecham Inc., 245 F.3d 1048, 1053 (9th Cir. 2001).

[lxxiii] U.S. ex rel. Absher, 764 F.3d at 709.

[lxxiv] See In re Genesis Health Ventures, Inc., 112 F. App’x 140, 143 (3d Cir. 2004) (applying the worthless services theory, but the opinion was not published).

[lxxv] No. Civ.11-11170-DPW, 2014 WL 1271757, at *9 (D. Mass. Mar. 26, 2014).

[lxxvi] Id.

[lxxvii] Id. at *13.

[lxxviii] See, e.g., Bayou Shores SNF, LLC v. Burwell, No. 8:14-CV-1849-T-33MAP, 2014 WL 4101761, at *2 (M.D. Fla. Aug. 20, 2014) (CMS imposed a civil monetary penalty of $3,050 after it found that conditions in the SNF “constituted immediate jeopardy to residents’ health and safety and substandard quality of care”).

[lxxix] Pro Publica, Nursing Home Inspect, available at http://projects.propublica.org/nursing-homes (using CMS data from nursing homes’ last three inspection cycles) (last visited Feb. 24, 2015).

[lxxx] Id.

[lxxxi] Id.

[lxxxii] Press Release, DOJ, Detroit Home Health Agency Office Manager Sentenced for Her Role in $5.8 Million Medicare Fraud Scheme, Apr. 8, 2014, available at http://www.justice.gov/opa/pr/detroit-home-health-agency-office-manager-sentenced-her-role-58-million-medicare-fraud-scheme.

[lxxxiii] Press Release, DOJ, Episcopal Ministries to the Aging Inc. to Pay $1.3 Million for Allegedly Causing Submission of Claims for Unreasonable or Unnecessary Rehabilitation Therapy at Skilled Nursing Facility, Sept. 15, 2014, available at, www.justice.gov/opa/pr/episcopal-ministries-aging-inc-pay-13-million-allegedly-causing-submission-claims.

Leave a Reply

Your email address will not be published. Required fields are marked *