Nursing home cannot use Medicaid payment structure to evade 'worthless services' charges, federal court rules

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Jury hands down $14 million negligent care verdict to nursing homes
Jury hands down $14 million negligent care verdict to nursing homes

A nursing home cannot cite Medicare and Medicaid payment methods to escape charges that it provided “worthless services,” a federal judge recently ruled in a False Claims Act case.

The Mississippi nursing home, its former owner and certain affiliated organizations are facing charges of billing government health programs for “non-existent, grossly inadequate and materially substandard, worthless, harmful care,” the complaint states.

Medicare and Medicaid do not pay for specific services, but rather pay prospectively for the daily “bundle” of nursing home services, the defendants noted. Therefore, “the United States must plead that the ‘entire bundle of billed-for services had no value to the Government' to prevail on a worthless services theory,” the defendants argued in court documents.

District Judge Carlton W. Reeves of the Southern District of Mississippi rejected that argument in a July 9 ruling.

Reeves cited the government's “compelling” counterargument that this logic ultimately means that a nursing home should be paid “for doing nothing more than housing an elderly person and providing her with just enough bread and water for short-term survival, even in conditions of filth, mold and insect infestation.”

These conditions were allegedly the norm at the nursing home in question, the 120-bed Oxford Health & Rehabilitation Center in Lumberton. The recent ruling includes dozens of examples of substandard care and unsanitary conditions identified by surveys and other inspections between 2005 and 2012, including a snake discovered in a resident's bed. These examples are sufficient to sustain the government's “worthless services” claim, Reeves ruled.

The case originated with a whistleblower complaint in 2008, and the government subsequently joined the action. Several of the whistleblower's charges were dismissed because the allegations already were reported in newspapers and other sources prior to the complaint filing, Reeves determined.

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