The jury’s finding came after five weeks of testimony in the complicated case involving Brighton Rehabilitation and Wellness Center and Mt. Lebanon Rehabilitation and Wellness Center. The US Attorney’s Office for the Western District of Pennsylvania also prosecuted five company and facility leaders for their roles in a scheme that led to overbilling; the jury found all five not guilty.

Brighton Rehab itself was found guilty of healthcare fraud and five counts of falsification of records in a federal investigation, while Mt. Lebanon was found guilty of one count of falsification of records related to healthcare matters and three counts of falsification of records in a federal investigation. The nursing home defendants are scheduled to be sentenced in May before US District Judge Robert J. Colville.

Neither prosecutors nor defense attorneys offered a solid explanation as to why the jury reserved its convictions for the corporate defendants. But US Attorney Eric Olshan told McKnight’s Long-Term Care News in an email Monday night that his office would pursue similar cases in the future, if warranted.

“Our legal system entrusts the jury with making determinations of guilt, and as in all cases, we respect the jury’s verdict,” he said. “Today, the jury held the two corporate defendants criminally liable for a total of 10 counts of making false statements and obstructing CMS’s critically important work of ensuring that nursing facilities comply with the law.  This office and our law enforcement partners will continue to seek accountability for any individual or business that pursues profit through deceit and does so at the expense of vulnerable members of our community.”

Several counts in the indictment that precipitated this fall’s trial carried up to $250,000 in fines, or jail times in the case of individuals. In a press release issued by the US Attorney’s Office Monday evening, prosecutors said the companies faced a maximum of five years probation, $500,000 in fines, or both, on the counts for which they were convicted.

A message from McKnight’s Long-Term Care News left with a nursing leader at Brighton Rehabilitation for Comprehensive Healthcare Management Services was not returned Monday.

Prosecutors had alleged two different schemes to enrich the nursing homes’ operations. In the first, leaders were accused of falsifying payroll documents to make it appear the nursing homes were meeting required staffing levels, including having non-working direct care staff clock in for shifts they never intended to work. In the second, administrators were accused of changing assessments to make it appear patients were clinically depressed or needed more therapy as a means of delaying discharge and driving Medicare or Medicaid reimbursements.

But in court, attorneys for the individual defendants framed the case as one of sloppy record keeping and government malfeasance, rather than intentional fraud, TribLive reported.

They also hit at the credibility of 20 former nursing home employees as having an ax to grind. Some were fired, others quit and some were offered immunity in exchange for their testimony, the Pittsburgh Tribune-Review noted in its coverage of last week’s closing arguments.

Kirk Ogrosky represented Sam Halper, Brighton’s CEO and 12% owner and an officer at Mt. Lebanon. Orgosky argued there was no evidence Halper was involved in ordering or completing incorrect staffing records but instead told the jury that a handful of staff members came up with a scheme to cheat the buildings’ corporate owners.

“Throughout this case, all defendants cooperated with the US Department of Justice in every way possible. Yet, DOJ pursued individuals without regard for the truth,” Halper said in a statement shared with TribLive. “Thankfully, the jurors were able to hear the evidence and find that the facts did not support DOJ’s claims.”

Ogrosky did not return a message from McKnight’s seeking additional comment Monday.

COVID immunity laws were adopted by at least 38 states during the height of the pandemic. Lawmakers’ willingness to excuse healthcare providers acting in good faith from COVID lawsuits was widely viewed as a move necessary to keep facilities open amid the public health crisis. The federal government, likewise, adopted a federal law protecting providers from litigation related to the prevention or treatment of COVID.

But after the pandemic’s first year, New York became the first state to repeal its shield law, known as the Emergency or Disaster Treatment Protection Act. It was clear providers would no longer face blanket protection from state cases moving forward. But plaintiffs’ attorneys also argued that the April 2021 repeal should erase promised protections retroactive to the pandemic’s start.

Pine Haven Nursing and Rehabilitation in Philmont, NY, asked the court to dismiss a complaint that made such an argument in a negligence case. The lawsuit was brought by the estate of long-term resident Janice Tipple, who died after contracting COVID in April 2020.

A five-judge panel of the New York Supreme Court Appellate Division for the Third Judicial Department on Thursday dismissed the plaintiff’s call for a retroactive case, noting that most courts interpret laws — even repealed ones — to be forward-looking in nature.

The court noted that legislators did not appear to intend to make the repeal retroactive, comparing language in the shield’s April 2020 adoption that included a retroactive effective date to language in the 2021 repeal, which did not.

While many jurisdictions have repealed their immunity statutes or allowed them to expire, one attorney told McKnight’s Long-Term Care News Friday that most courts would not allow arguments on retroactive application to stand. But this case, added to existing case law, could be seen as “persuasive precedent” outside of New York, too.

Proof of good-faith efforts

Attorneys for Tipple’s estate argued that retroactive application was the correct approach in New York because lawmakers meant it to be remedial, or fix past wrongs. But the justices rejected that argument outright, writing that “retroactive application of the repeal of the [law] would merely punish healthcare providers ‘for past conduct they cannot change — an objective [that has been] deemed illegitimate as a justification.’”

The state Supreme Court itself had previously held that the facility had no immunity protection and denied a motion to dismiss in part.

In addition to restoring state immunity, the ruling Thursday also dismissed the negligence  claims on a factual basis. The defense argument was bolstered by evidence from staff that the facility had acted in “good faith” and used state- and FDA-approved supplies “on a daily basis in order to monitor, diagnose, treat and prevent the spread of COVID-19.”

Pine Haven also was able to demonstrate that in enacted infection control practices, such as visitor restriction and employee screenings, and that those practices were used in Tipple’s care. The facility had a state health department inspection in April 2020 and had no deficiencies related to COVID management. 

Those facts, the court wrote Thursday, “unquestionably” established that the facility had worked in good faith and could not be carved out of the COVID immunity coverage because of gross negligence.

Tipple’s case was dismissed in its entirety.

This strategic move positions the facility to excel in representing itself to external stakeholders and, crucially, defending against potential reputational challenges. 

Since that writing, my conviction in the concept of appointing a data czar has only grown stronger. Several recent experiences have concretely shown how a dedicated individual in this role can make a substantial difference. These experiences allowed me a more comprehensive understanding of a data czar’s role in ensuring data integrity and contextualizing the data to uphold the reputation of their nursing home. I’ll talk about one of them here.

A recent courtroom case I took part in involved a frail elder admitted to a nursing home with several pressure ulcers, post-CVA. One of the ulcers became unstageable, and shortly after admission the resident was transferred back to the hospital, where he died. Although he resided in the nursing home for less than a month, the nursing home was being held accountable for the pressure ulcers. Low staffing was part of the complaint.

Plaintiffs commonly include low staffing in their complaints, and this case was no different. Here, the plaintiff relied upon staffing sheets, various depositions from staff and family, and their interpretation of the state’s staffing requirements. 

The defense cited PBJ data and presented a more precise analysis of the staffing requirements in the facility’s state. Both of these sources supported the idea that the nursing home met the federal and state staffing requirements. 

Related to the pressure ulcers, while I wasn’t providing expert testimony on them, I did point out that the plaintiff’s expert was using a contemporary MDS 3.0 definition of ulcer coding that didn’t align with the MDS coding conventions that were in place when the nursing home assessed the resident. Thus, the plaintiff’s conclusion of “MDS manipulation” wasn’t valid. 

All that said, as I stood in the courtroom, it became clear that while accurate and contextualized data is undeniably crucial, it has its limits. The jury’s preconceptions of nursing homes, their comfort level discussing sensitive subjects like death, and the emotional state of the plaintiff’s family all played pivotal roles in the proceedings. 

Throughout this legal battle, it became evident that my empathy to the resident’s family and to the nursing home, coupled with my steadfast focus on the nursing home’s data story, was the key to achieving a favorable outcome.

I’d like to acknowledge that finding a jury with a neutral opinion about nursing homes, and about aging in general, may be near impossible. The societal stigma attached to aging and death, and to the institutions associated with those realities, remains deeply ingrained no matter how we try to change it. 

In moments like these, I’m reminded of my favorite W. Edwards Deming quote: “Every system is perfectly designed to get the results it gets.” However, I’d like to take that concept a step further and add a twist. Despite systemic challenges, regulatory constraints, and reimbursement designs, the nursing home industry consistently exceeds what it’s expected to achieve. I fervently believe that this is due to the mission-driven individuals who work with the elderly. But perhaps that’s a topic for another blog!

As the “proxy” data czar during this courtroom case, my experience as a nurse working in nursing homes proved to be irreplaceable. In this role, I wasn’t just capable of telling the quantitative data story; I could also provide the vital qualitative perspective. It was the synergy between my data expertise and my deep understanding of the nursing home’s daily operations, as well as the human side of healthcare, that ultimately contributed to a positive outcome for the defense.

Data without subject matter expertise can be a double-edged sword, capable of being weaponized against you. However, the key to mounting a strong defense lies in knowing your data intimately and having the ability to tell your story in a way that only you can.

Furthermore, the empathy derived from working in a nursing home, where one understands the inherent joy and sadness of aging and the inevitable reality of death, is an invaluable asset. Compassion for residents and their families should be an essential part of the data czar’s job description.

Steven Littlehale is a gerontological clinical nurse specialist and chief innovation officer at Zimmet Healthcare Services Group.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.

This has created two very different approaches, the so-called “Missouri” and “New York” rules. Understanding these two interpretations is essential in determining whether a SNF’s materials might be protected by QA. 

At its most basic, the quality assurance privilege means documents created in furtherance of improving the quality of resident care at a nursing home facility should not be discoverable in litigation. The privilege comes from the Federal Nursing Home Reform Act (“FNHRA”), which requires that all nursing home facilities maintain a certain standard of care for their residents. 

The FNHRA also mandates that facilities maintain a quality assessment and assurance committee to identify and develop plans to correct deficiencies in the quality of care provided to residents. The FNHRA creates the federal quality assurance privilege (FQAP) that “A State or the Secretary may not require disclosure of the records of such committee except insofar as such disclosure is related to the compliance of such committee with the requirements of this subparagraph.” See, 42 U.S.C. 1392r(b)(l)(B), concerning Medicare requirements,  and 42 U.S.C. § 1396r(b)(1)(B), which concerns Medicaid requirements. 

However, many states also have their own QA statutes. The result is that there are different standards for disclosure depending on your particular jurisdiction. 

Missouri Rule – Narrow Interpretation

The narrow approach, the so-called “Missouri Rule,” generally holds that only documents actually created by the quality assurance committee are protected by the quality assurance privilege. This interpretation comes from State ex rel. Boone Retirement Ctr., Inc. v. Hamilton, which involved a subpoena for any and all quality assurance records, reports and/or attachments reflecting materials generated by or presented to the defendant’s QA Committee. 

The Court rejected the defendant’s attempts to protect the QA materials, holding that records of the QAPI committee extended only to the committees’ own materials. Privilege protection was not extended to reports submitted to the committee by any other source. The Missouri Rule has been adopted in other states, such as Pennsylvania and Tennessee. In essence, under the Missouri Rule, documents that are created outside of the committee and submitted to the committee for its review are not protected by privilege. Thus, the FQAP privilege only protected the committee’s own records, minutes, internal working papers, statements and conclusions. 

New York Rule – Broad Interpretation 

The New York Rule originated in In re Subpoena Duces Tecum to Jane Doe, Esq., where a New York grand jury issued subpoenas seeking records from various nursing home facilities as part of a Medicaid Fraud investigation. The subpoenas requested documents, including incident/accident reports, monthly skin condition and pressure sore reports, monthly weight reports, infection control reports and lists of any facility-acquired infections. The facility argued that all documents sought were protected by the quality assurance privilege. 

The New York Court of Appeals determined that some of the requested documents were protected while others were not. For example, the Court held that the monthly skin condition and pressure sore reports, monthly weight reports, and lists of any facility-acquired infections, none of which were required to be maintained pursuant to state or federal regulations, were privileged QA materials. In reaching this conclusion, the Court held that the QA privilege encompassed within its parameters any reports generated by or at the behest of a quality assurance committee for quality assurance purposes. Thus, documents not created by the quality assurance committee itself could still be protected. The New York rule has been adopted in other states, including Georgia, Florida, Alabama and Massachusetts. 

Whether a particular court follows the Missouri or New York Rule, a few things are evident from the case law. First, establishing a pathway to privilege requires understanding the existing regulations. The federal QAPI law is quite restrictive, only protecting materials actually prepared by the QA Committee. State law may provide more expansive protections, but this does not mean that the QA Committee itself should be overly inclusive. The importance of delineating the members of the QAPI committee and drawing them from various disciplines within the facility should be self-evident, but what happens when an SNF utilizes outside consultants? 

Often, consultants are engaged to evaluate clinical issues and provide guidance on improving quality care measures. These activities can consist of chart audits, actual observation of residents and staff on the unit, and, of course, creating actual reports of their findings. Whether privilege pertains to records compiled by third-party consultants or is limited to the quality assurance committee’s internal records was recently addressed by the Kentucky Supreme Court in Henderson County Health Care Corp. v. Wilson.

There, the facility contracted with consulting nurses to evaluate the facility’s quality of care and provide guidance to the QA Committee on where care could be improved. Plaintiff sought the consultants’ materials. The Court found that the consultants’ reports were privileged under the FQAP, treating the contractor as an agent of the QAPI committee as the nurse consultants were performing a function that would likely be kept in-house in a larger institution. To hold otherwise would be to fail to recognize that it may not be feasible for a small nursing facility to employ, on its own staff, persons with Quality Assurance expertise. 

In such a situation, the Court held that the goals of the FNHRA may be best served by contracting out these responsibilities and that contracting for assistance in performing QAPI functions does not inhibit this goal. The reports generated by the nurse consultants employed by the facility and provided to the facility’s QAPI committee were then used by the committee to improve care at the facility, i.e., for quality assurance purposes, and as such, were protected by privilege. 

Other pathways to privilege include resisting the urge to combine QAPI with reports of general business matters. While combined reports may be more efficient for facility operations, this type of mixed-purpose use creates ambiguity as to whether privilege applies. For example, a report of a visitor’s slip and fall or a financial report is likely not QAPI. Likewise, resident council minutes, annual emergency preparedness, reports of suspected crimes, lists of transfers, and census information, all of which are specifically required by 42 CFR 483, exist independently of QAPI and are not privileged under FQAP. Ordinary incident reports may not be privileged under FQAP. 

The legal system favors disclosure, and courts narrowly construe privileges. Very limited ones, such as attorney-client, work product privilege, spousal privilege, religious privilege, and psychotherapist-patient privilege, are actually recognized. As such, claims of privilege are carefully scrutinized, and the burden of proving that a privilege applies rests on the party claiming its benefit. 

Thus, the provider, with the assistance of legal counsel, is charged with the duty of educating the court to better its understanding of the context of why the disputed materials are privileged and, in doing so, a detailed affidavit about the parameters of a given facility’s QA program is necessary. Invariably, courts scrutinize such affidavits for specific information about whether the QA committee directed to be created or actually reviewed the materials for which privilege is asserted. The mere citation of privilege in the abstract will not protect materials from disclosure. 

Argument over which approach, the Missouri or New York Rule, is the more reasonable shall continue. As such, facilities should expect continued legal challenges as to their internal review processes and proactively examine them to maximize the available QAPI protections in their jurisdiction. 

Mario Giannettino is a partner with the law firm Kaufman, Borgeest & Ryan, LLP. He defends a range of healthcare professionals in civil litigation and regularly publishes and speaks nationally on matters relating to all aspects of healthcare defense. Mario is also recognized by the American Hospital Association as a Certified Professional in Health Care Risk Management. 

The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information and content is for general informational purposes only.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.

Those were just two of the valuable insights experts from law firm Sheppard Mullin revealed when on a  webinar examining an uptick in cases being brought by the US Department of Justice. The firm also offered warnings against giving investigators “low-hanging fruit.”

“Nursing facilities that lack adequate staffing are increasing their FCA risk,” said Gregory Smith, a partner in the Governmental Practice in the firm’s New York office, during the Aug 2. webinar. “The easiest allegation for the government to make is that you were understaffed and, therefore, you could not provide quality care and your care was substandard.”

Smith suggested that facilities maintain a staffing rating of at least three stars.

“Anything less is low-hanging fruit,” he observed. 

In fiscal year 2021, the federal government recovered $5.6 billion from False Claims Act cases with $1.6 billion coming from qui tam — or whistleblower — investigations across healthcare settings. There were 598 new qui tam cases that year in total. While the amount of money recovered dropped to $2.2 billion in Fiscal Year 2022, the number of new qui tam cases rose to 652. The total number of cases brought that year was 948, a new record, Smith said. 

The most common reasons a nursing home could be investigated under the False Claims Act, per Smith, include kickbacks, poor documentation to support claims and improper disenrollment practices such as the facility initiating disenrollment from Medicare Advantage into Medicare, which must be initiated by the resident or resident’s family, and delays in discharge. 

“If [a resident is] ready for discharge, you need to be focused on getting them out of their bed and into their homes or the next level of care,” instead of stalling the process to obtain another day’s reimbursement, Smith said.

Smith also cautioned that nursing homes should have legal counsel vet all marketing and sales agreements to ensure compliance with all jurisdictions. Facilities can run into legal trouble if they pay marketers for patient referrals, especially Medicare referrals, or for taking a home’s census into account when calculating marketing compensation. 

Last year, the Biden administration announced a series of reforms aimed at improving the quality of care and transparency for nursing home ownership. Those reforms include the long-anticipated minimum staffing requirement that is sitting at the Office of Management and Budget, awaiting public release.   Congress, too, has stepped up its attention to the sector, holding hearings and issuing stern and lengthy reports on the quality of care, state oversight, and investments and holdings from private equity firms and real estate trusts. 

Facilities are operating in an “era of heightened enforcement and risks,” added Danielle Vrabie, a partner in the Business Trial Practice Group in the firm’s New York office and a member of the healthcare practice team.

“The False Claims Act has had a bizarre history of being an inconsequential statute to now really being at the forefront of government enforcement actions,” she said during the webinar, which was titled, “Home Health Agencies, Skilled Nursing Facilities Face Increased False Claims Act Enforcement Risk.”

In March 2020, a federal initiative to coordinate False Claims Act cases led to investigations at approximately 30 facilities in nine states, Vrabie said. The complaints were filed under seal, but Vrabie said they are starting to be made public. The sector should expect to see press releases from the Department of Justice spur media reports, which often lead to heightened scrutiny from lawmakers and regulators. 

Here are some things that you may have overlooked while valiantly battling on the frontlines of COVID at your facility over the last several years. 

Resident contracts

I tell clients that resident contracts need to be reviewed yearly by their attorneys. Why? Because there are often updates to the law that can help you avoid problems down the road in your resident contracting. Think of it as a way to keep you out of trouble, and prevent more costly litigation down the road. Also, there may be particular residents or circumstances that posed problems for your facility that can be discussed with your attorney, and that could be remediated through simple contract revisions.    

With everything going on in long-term care, this year, I am making the effort to remind clients to revise their contracts with an attorney to avoid liability in the future. Regular contract revision is sound, good risk management. One of the easiest ways to eliminate or reduce your liability is to revise and update your resident contracts. 

For example, the provision of arbitration agreements in your contracts is just one of many updates that need to be looked into with your resident contracts. Indeed, the law concerning arbitration agreements in nursing home contracts has changed over time, and several times over the last many years. Failure to have a robust, legally sound arbitration provision will only result in an arbitration clause that will be deemed unenforceable if challenged in court. 

Compliance & ethics program updates

Another item you may have neglected while on the COVID front lines are your compliance plans. Too many facilities have a draft compliance plan gathering dust on a shelf somewhere. Nothing could be worse for a facility. Why? 

Because if the government comes knocking and they see that you have a compliance plan on your shelf, but you haven’t followed it in practice or even implementation, that will often lead to higher fines and penalties because the government will see that you knew the importance of compliance plans, but you actively chose not to take the time to adhere or implement it properly. 

Instead, focus on making sure you reinvigorate your compliance committee if you haven’t been having regular and documented compliance meetings over the pandemic. Also, now is a good time to have your compliance plan reviewed by competent healthcare counsel to ensure you take full advantage of the protections compliance plans can offer not only to your facility but also to the administrator, executive director, CEO and the rest of your management team. 

Over the years, I have found that often having an attorney sit in on a compliance committee meeting can help to guide effective compliance plan implementation. And remember, documentation and follow-up are always key. Corporate compliance plan implementation does not have to be daunting, it just needs to be done, and done right. 

HIPAA compliance

It is never a bad time to retrain and update your staff on HIPAA privacy and security compliance. Whether it is conducting regular privacy and security meetings or instituting your HIPAA-required Security Risk Assessment, doing these things now can help avoid major fines and penalties in the future for noncompliance. 

Furthermore, attention to privacy and security can help to avoid the number one problem we see in HIPAA noncompliance and exorbitant fines and settlements for violations of HIPAA: human error. Re-educating your staff and updating your policies can have a dramatic effect on not only avoiding human error, the number one cause of HIPAA breaches, but it also can help improve your operations. 

In fact, each of the above three things you may have ignored over the COVID-19 pandemic are all there to help improve your operations. Yes, risk management is also a key output of updating and implementing these initiatives, but if you do so, your facility will also find improved operations, which is key, and the lifeblood of any well-run facility these days. 

Neville M. Bilimoria is a partner in the Chicago office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP; nmbilimoria@duanemorris.com.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.

We are all waiting to see the possibility of proposed rules over federal minimum staffing ratios in nursing homes. 

But with possible federal minimum staffing ratios looming, let’s make sure the government calculates staffing ratios right!  After all, one state recently experienced incorrect calculations for nursing home staffing levels, and facilities that sit back and wait for the government to work out proper calculations may be frightened to learn of the potential legal and public implications.

The irony

First, let’s just talk about the harsh idea of minimum staffing ratio rules for facilities coming out of a pandemic.  We all know that the pandemic was tough on providers and that our nation’s nursing homes were heroes, not scapegoats, for the spread of COVID-19. But we also clearly know that out of the pandemic we saw a real problem develop, a problem that lingers today:  monumental nursing home and assisted living staffing shortages.  

We also saw great losses of residents, lower census and decreased profits for nursing homes, nay, huge losses over the pandemic in spite of CARES Act Provider Relief Funding which only placed a bandaid on the above problems.  

So in the wake of this onslaught of operational and financial woes for facilities reeling from the pandemic, the government now wants to slap nursing homes in the face with minimum staffing rules?  Sounds far-fetched, like pouring salt on a lingering wound.  

What we can learn from Illinois

But it is already happening in Illinois.  Over the summer, the Illinois Department of Public Health (IDPH) began to enforce minimum staffing standards under its Nursing Home Care Act, standards that were delayed in enforcement due to the pandemic.  In July 2022, IDPH issued nursing home staffing ratio violations, with huge penalties, for the January – March 2022 quarter, citing deficiencies in meeting the state’s minimum staffing requirements.  

What is worse is that the penalties were outrageously high.  Some facilities saw penalties of hundreds of thousands of dollars, even as high as $1.6 million in IDPH fines, JUST for that three-month quarter alone.  

If you think it could not get any worse, it did. After providers were up in arms about the penalties, which clearly would have bankrupted many facilities outright, it was clearly discovered that IDPH’s staffing ratio calculations were incorrect.  In other words, IDPH utilized incorrect census information and staffing information from PBJ reporting or from facility reports that were outdated.  

In essence, IDPH’s fines amounted to fining facilities for lack of staff for beds that were not occupied, or they failed to count staff on the floor due to incorrect interpretations of the minimum staffing rules.  

All of this resulted in IDPH rescinding those initial notices and deciding that subsequent initial notices for the first few quarters would be corrected and that the fines would not be enforced… yet.  

Indeed, many providers that were even over-staffed received notices of fines and then subsequently corrected notices showing zero fines.  Talk about a scary situation!

Beware of the implications

But providers need to be vigilant against the government in their minimum staffing ratio determinations and calculations.  If the government does not have an accurate census or PBJ reports for a facility, and claims you are fully bedded when the facility is not, it is not fair to cite facilities for a failure to staff an empty bed!  Yet that’s part of what the government was doing initially.  

Also, beware of the impact of these types of governmental notices and proposed fines — legally.  Even though the fines do not apply (yet) in Illinois, providers should carefully consider appealing these notices legally in order to avoid potential harmful effects on the nursing home.  

For example, in Illinois, failure to appeal staffing ratio violation notices results in the notice of violations becoming a default judgment against the nursing home – whether that notice was correctly calculated or not.  Some providers did not even know if the calculations were correct and needed time to calculate the proper staffing ratios for prior quarters in their facilities.  

Yet failure to request an appeal of the notices, timely, would automatically result in a default judgment on the record, meaning the facility would be tagged as having committed sometimes egregious staffing shortfalls, shown as a VIOLATION of minimum staffing ratio levels.  

The problem with “accepting” the government’s calculations in this way is that it would remain on the record of the nursing home for the public to see.  For example, what affect would a default judgment have on a nursing homes’ insurance coverage?  What about such a default judgment providing even more fodder for nursing home lawsuits?  

So we have to be vigilant about these calculations when they come down from the government.  Nursing homes should not just sit back and wait for agencies to figure out the proper calculations on their own.  Doing so could negatively mark the facility’s record, and could lead to bad public relations for the home.  

With federal staffing ratio minimums looming, providers need to pay attention and not readily accept government calculations.  Facilities also must make sure the facility’s PBJ reporting (which the government uses to assess staffing) is accurate and take steps to correct incorrect PBJ reports now.  

After all, no one likes to see nursing homes cited with a failure to have enough staff for their loved ones, even if the violation was minor.  But failing to take action to protect proper calculations of staffing ratios could lead to problems in future liability for nursing homes. 

Neville M. Bilimoria is a partner in the Chicago office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP; nmbilimoria@duanemorris.com.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

I wanted to bring to your attention an important case that, while it may not directly affect your facility, potentially may show the increased degradation of nursing home rights. It also may signal the increasing specter of greater liability for nursing homes. 

On May 2, the U.S. Supreme Court agreed to consider an appeal in Health and Hospital Corp of Marion County, Indiana v. Talevski.  

This case involves a 2019 lawsuit brought by Ivanka Talevski of Indiana who claimed that her husband was subjected to harmful psychotropic drugs and was inappropriately transferred to an all-male facility in violation of the Federal Nursing Home Reform Act (FNHRA), a 1987 federal law that establishes a bill of rights for residents of nursing homes receiving Medicare or Medicaid funding. 

The complaint argued that because the defendant, Health and Hospital Corp of Marion County, was publicly owned (a county facility), she could sue for damages under Section 1983 of the U.S. Code, which allows individuals to sue government entities that violate their legal rights.

HHC has maintained that Talevski’s treatment was related to his violent behavior toward staff and other residents.  The provider moved to dismiss the case, arguing that FNHRA did not allow individuals to sue for violations under federal law. But before the merits of the case are even discussed, the Supreme Court has to determine whether individuals like Talevski have the ability to sue county nursing homes in federal court using Section 1983, which would undeniably increase liability for these homes.

Below is a brief overview of the procedural posture of the case which has far-reaching implications for county nursing homes across the country:

1. The primary question presented: whether OBRA ’87 created federal “rights” that are enforceable by SNF/NF residents against government-operated facilities (County Nursing Homes) under 42 U.S.C. 1983.
2. A District Court held that the answer is “no,” which conflicts with published opinions issued by the Third and Ninth Circuits.
3. Plaintiff-Appellant is supported by three different amicus briefs in the Seventh Circuit, including one by AARP.
4. The American Health Care Association’s affiliates in Indiana, Illinois, and Wisconsin jointly filed an amicus brief (filed in October 2020).
5. However, in July 2021, a three-judge panel of the 7^th Circuit Court of Appeals issued a published opinion (6 F.4th 713) reversing the District Court and agreeing with appellate authority from other circuits finding that OBRA ’87 creates federal “rights” that are enforceable by SNF/NF residents against government-operated facilities under 42 U.S.C. 1983.
6. The defendants filed a petition for a writ of certiorari in the Supreme Court that was docketed on December 1, 2021.
7. AHCA and the Indiana Health Care Association filed an amicus brief in support of the petition on January 3, 2022; 17 States (led by Indiana) also filed an amicus brief in support of the petition.
8. The Supreme Court granted the petition on May 2, 2022.
9. The parties will brief the merits over the summer; oral argument likely will be scheduled for a day in late fall 2022; a decision should be issued no later than June 2023.
10. Any amicus brief on the merits was due by June 23, 2022.

Ultimately, on May 2, 2022, the U.S. Supreme Court granted the petition to hear the case from Health and Hospital Corp of Marion County, IN, and a nursing home it operates, Valparaiso Care and Rehabilitation (“Valparaiso”).

The U.S. District Judge James Moody in Hammond, IN, initially sided with the nursing homes and found that the federal rules for Medicare and Medicaid recipients stemmed from the government’s spending power, and should be understood as contracts between the government and providers that do not allow for third-party claims like Talevski’s claim.

The 7th U.S. Circuit Court of Appeals reversed the District Court’s decision, however, finding that FNHRA’s language did support such claims. It noted that the Supreme Court had allowed private lawsuits stemming from the government’s spending power before, most recently in a 1990 decision, Wilder v. Virginia Hospital Association, allowing hospitals to sue states over Medicaid reimbursement rates.

HHC and Valparaiso (the nursing home) argued to the Supreme Court that by allowing the lawsuit to go forward, the 7th Circuit had effectively “federalized” malpractice law for public nursing homes, overriding state malpractice laws that often cap damages and attorneys’ fees.

So the issues in this case before the U.S. Supreme Court, while only affecting county nursing homes, could have the potential to increase liability for county nursing homes nationwide. 

In addition, while the case only seemingly applies to county nursing homes, the implications for nursing homes generally seem much broader: Why is the law continuing to contemplate increased liability for nursing homes in the current litigious environment? The last thing the industry needs is a federal cause of action to allow residents to gain further federal rights where there were none before. 

So you might be reading this and think that this case has no ramifications for non-county nursing homes. In reality, however, it has the potential to further increase liability for nursing homes generally by fostering yet another mode of malpractice litigation in federal courts. 

We should all keep an eye on the Talevski case to see where the Supreme Court lands on whether to allow the Talevski side to sue in federal court.

Neville M. Bilimoria is a partner in the Chicago office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP; nmbilimoria@duanemorris.com.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

The Department of Health and Human Services (HHS) Appeals Board recently ruled in Life Care Center of Kirkland v. Centers for Medicare & Medicaid Services, and upheld a finding of immediate jeopardy as to Kirkland’s infection control policy and its operational functioning during the coronavirus pandemic.

This issue is now placed at the forefront of regulatory compliance issues for skilled nursing facilities.

The CMS-imposed civil monetary penalties (CMPs) of $13,585 a day and denial of payments for new admissions (DPNAs) were found to be reasonable and the judge reasoned that while the CMS and CDC did not begin issuing specific infection control guidance for COVID-19 until March 2020, the “fundamentals of infection control” remained unchanged. 

The Kirkland case highlights HHS’ opinion that, from the early onset of COVID-19, providers had knowledge of and were bound by then existing infection control standards. More importantly, the opinion serves as a reminder that fully implementing infection control policies is just as important as having them in the first place. 

What happened?

On Feb. 19, 2020, the Seattle and King County Health Department issued a pamphlet indicating that COVID-19 was a new virus strain that may spread by respiratory droplets from coughs or sneezes between people within six feet from each other. Because the virus was not spreading widely in the U.S., it was recommended to take steps like those used to prevent the spread of a cold or the flu. 

The judge in the Kirkland case acknowledged, with the benefit of hindsight, that the local health department’s pamphlet, along with concurrent statements from state and federal authorities, may have given healthcare workers a false understanding of the potential risk.

Kirkland, a SNF outside of Seattle, noticed a cluster of unexplained fevers and respiratory infections on Feb. 26, 2020. That same day, the facility’s infection control nurse notified the Seattle and King County Health Department and implemented protective interventions including closing to visitors, informing families, increasing the use of personal protective equipment, closing dining and therapy rooms, cancelling group activities, and increasing bleaching of all services and public areas. 

On Feb. 28, 2020, Kirkland learned that both a hospitalized staff member and a resident tested positive for COVID-19. Within the next two days, the state and county issued emergency proclamations, encouraging people to stay home if sick, wash their hands often, and to sanitize touched surfaces. Neither proclamation contained specific guidance for handling SARS-CoV-2 or its resulting illness. 

Between Feb. 19 and March 7, 2020, 57 of Kirkland’s 120 residents tested positive for COVID-19, and nearly half of its staff members were unable to work. The facility’s medical director was among those sick. 

On March 6, 2020, amid the chaos of a steeply rising case count, CMS began a ten-day complaint survey of Kirkland. To provide context, it was on March 11, 2020 that the World Health Organization (“WHO”) formally declared the global pandemic. The judge in Kirkland admonished CMS for conducting its survey “during a critical emergency that truly involved life and death,” stating “…it would have been a better exercise of discretion to not create any distraction that could have adversely impacted resident care.” 

He also stated that “staff did almost everything correctly” and “made a heroic effort to care for and save residents.” 

The Board’s decision

While the CMS survey resulted in a finding of noncompliance on seven counts, three of which allegedly placed residents in immediate jeopardy, only one count was upheld on appeal. 

The facts, according to the Judge’s de novo review of the case, supported that Kirkland failed to fully implement its infection prevention control program (IPCP). On Feb. 26, 2020, the very day that Kirkland reported the uptick in unexplained fevers and set forth its infection control interventions, a previously planned Mardi Gras party was allowed to proceed that included a visiting music group. Distancing was observed at the party, but the undisputed fact that the party was held amounted to a serious violation of the IPCP and supported the finding of immediate jeopardy. 

According to 42 CFR 488.301, immediate jeopardy means that noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.  

The judge ruled that a finding of immediate jeopardy “must be upheld unless it is clearly erroneous,” or that a reviewing judge or authority has a “definite and firm conviction that an error has been committed.” Because Kirkland failed to show that the declaration of immediate jeopardy for noncompliance with its IPCP was clearly erroneous, the penalty was upheld.

The complete CDC Infection Control Guidelines are available here — the infection control regulation is at 42 C.F.R. 483.80.

Norris Cunningham is a founding shareholder and leads the Health Care Practice Group at Katz Korin Cunningham PC (KKC) in Indianapolis. Contact him at ncunningham@kkclegal.com. 

Angela Rinehart is an associate attorney in the Health Care Practice Group at KKC and focuses her practice on the defense of long-term care providers. Contact her at arinehart@kkclegal.com.

Opinions expressed in McKnight’s Long-Term Care News columns are not necessarily those of McKnight’s.