Previously, you discussed the basics of the federal False Claims Act (FCA). What are some specific applications of the FCA in the nursing home and senior housing context?

In recent years, the federal government has ramped up its use of the FCA as a tool to help ensure the quality of care received by federal healthcare program beneficiaries. Under the FCA, actionable “false” claims include those submitted for a service allegedly of so little value that it was effectively “worthless,” and for a provider's false certification that the care provided met the applicable standards that were a precondition for payment.

The Second Circuit court thereafter held that, under the “worthless services” theory, the service must be so deficient that it is the practical equivalent of no performance at all. The court also held a provider can be found to implicitly certify compliance when the law upon which the plaintiff relies to bring a FCA action expressly states that the provider must comply in order to be paid.

Long-term care providers can be found liable under the FCA for substandard care. Providers also can be held accountable for failing to meet the required level of care when meeting minimum quality indicators is a condition of payment by a federal program.

The first step in compliance requires that nursing homes and senior housing providers remain diligent in overseeing their quality of care to ensure that services could not be deemed worthless. Compliance also necessitates the identification of all applicable quality of care standards upon which payment from a federal healthcare plan are contingent. Defending against such a claim brought by the government, even if unfounded, can lead to substantial legal costs and loss of business reputation.