State AG can use private law firms against nursing homes, court rules

The Pennsylvania Attorney General's office may continue using private law firms in consumer protection lawsuits against nursing homes, a state court ruled earlier this month.

In its January 11 opinion, the Pennsylvania Commonwealth Court ruled that the state Department of Health does not have exclusive authority to investigate long-term care facilities, and that private firms may also conduct investigations into billing practices, consumer marketing and staffing levels.

The court's decision allows Attorney General Kathleen Kane's office to continue its 2012 contingency fee agreement with Washington, D.C., law firm Cohen Milstein Sellers & Toll. Cohen Milstein began investigating staffing levels at several nursing homes soon after the agreement was reached.

The court's ruling also dismisses a petition for review from an alliance of 19 skilled nursing facilities that formed in April to fight Kane's agreement with Cohen Milstein.

Providers condemned the agreement as “improper”, arguing that the investigations were unfair since Cohen Milstein would receive a cut of any recoveries made by the state. The original agreement gave the firm 17% of any recovery for the state of up to $100 million, 10% of a recovery between $100 million and $200 million, and 5% of any greater recovery. The firm also contributed funds to Kane's 2012 election.

Cohen Milstein's investigations notably resulted in a lawsuit filed against Golden Gate National Senior Care LLC, which operates 36 facilities in Pennsylvania. Golden Living CEO Neil Kurtz called the suit the result of Kane's “inappropriate and questionable relationship” with a firm that “preys on legitimate businesses and is paid by contingency fees.”

The ruling comes as a win for the embattled Kane, who is currently facing an impeachment investigation and charges of perjury and obstruction of justice.