Matt Curley
Matt Curley

As long-term care providers brave the most significant public health crisis in our lifetimes, they also may find themselves at the center of an unprecedented increase in enforcement efforts driven by both government regulators and whistleblowers.

A wave of new initiatives and pronouncements by the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) and the U.S. Department of Justice (DOJ) have placed providers on notice that scrutiny of their operations, the appropriateness of their receipt of government funds, and reimbursement for the services that they provide will intensify in the coming months and years.

The significant operational difficulties and tragic outcomes experienced by a number of long-term care providers have been well-documented. Providers have faced extraordinary staffing challenges, critical supply shortages, and a lack of adequate testing for COVID-19, even as they have stood on the front lines of our nation’s healthcare system. Rightly or wrongly, providers’ actions in the face of the current crisis may very well be judged with the benefit of hindsight. Systemic breakdowns within nursing facilities will be the subject of much second-guessing as to the appropriateness of staffing, the adequacy of training, and the availability of supplies, notwithstanding this challenging environment.

In the midst of this crisis, government regulators have made clear that scrutiny of long-term care facilities is intensifying:

  • DOJ announced its National Nursing Home Initiative in furtherance of its previously-announced Elder Justice Initiative and forecasted increased civil and criminal enforcement efforts focused on nursing homes where grossly substandard care to residents has been provided.
  • The Centers for Medicare & Medicaid Services (CMS) announced the creation of a Coronavirus Commission for Safety and Quality in Nursing Homes, signaling that nursing homes should expect to see CMS take a much more active role in areas that traditionally may have been enforced by state agencies, e.g., CMS-mandated health and safety requirements. CMS has also made a number of pronouncements warning of increased scrutiny on long-term care providers and their preparedness concerning infection control and other quality measures.
  • Various state regulators have issued a significant number of new health and safety requirements for nursing home operators in the midst of the current pandemic and have promised licensing revocation if providers fail to provide adequate care.

While nursing home and elder care initiatives at the federal and state level are nothing new, the current crisis will result in an intensified focus on these issues. Increased resources devoted to investigations and more aggressive civil, criminal and administrative enforcement by regulators certainly will follow.

Funds with strings attached

DOJ and CMS pronouncements will not be the only drivers of the increased scrutiny that long-term care providers will face. Many providers facing acute financial pressure as a result of the COVID-19 pandemic have received much-needed financial relief made available through government stimulus and relief funds. Those funds present their own heightened enforcement risks as they come with certification requirements concerning the necessity of the funds. Those certifications will be scrutinized after the fact by regulators and whistleblowers alike.

Enhanced oversight and aggressive enforcement following such a significant and expedited distribution of government funds will not be far behind, led by government regulators such as the Special Inspector General for Pandemic Recovery and DOJ. For providers, maintaining contemporaneous documentation supporting the need for the funding and detailing how the funds were used will be critical to rebutting assertions that certifications of necessity were inaccurate when made or that the funds themselves were misused.           

Shift of focus to quality of care

Even before the COVID-19 outbreak, it was expected that government regulators would shift their enforcement focus toward quality of care concerns and whether long-term care residents were receiving adequate care. This change in focus stemmed from reimbursement changes that went into effect last fall, as reflected in the Patient Driven Payment Model (PDPM), which is now used to classify skilled nursing facility (SNF) patients in covered Part A stays.

Notably, industry response to the implementation of PDPM was marked by reporting of widespread staffing reductions in the wake of the new Medicare payment model, particularly with respect to therapy staff. Regulators and whistleblowers can be expected to pivot from fraud theories once largely premised on the overprovision of therapy to theories premised on the assertion that providers submitted false claims for reimbursement because they failed to provide adequate levels of care to patients. The much-publicized staffing reductions undoubtedly will be used to bolster such fraud claims, just as the government and whistleblowers pointed to performance metrics in cases challenging the medical necessity of therapy services in the past.     

There is no question that the current crisis will accelerate regulators’ focus on quality of care issues. Until adequate metrics are in place to monitor quality of care issues in a more transparent way, government regulators will do what they have always done — look for news reports of quality issues at facilities, focus on reports from whistleblowers, and rely on reports from government agencies on the front lines of monitoring quality issues. Providers would be well served to monitor quality metrics and complaints regarding quality of care and work to address any identified shortcomings as proactively and fulsomely as possible.

Data likely to drive enforcement and whistleblower activity

Finally, the increase in availability of provider data has allowed corporate data-analytic whistleblowers to mine Medicare claims data or other publicly available data sources to identify outliers as potential targets for False Claims Act (FCA) lawsuits. Lawsuits pursued by such relators are not characterized by personal knowledge of factual information associated with the alleged wrongdoing, which is the typical hallmark of well-pleaded FCA allegations. Rather, such professional relators are opportunistic, drawing inferences of fraud based on their own data analysis.

Such professional relators have made no secret regarding their intent to investigate and pursue FCA lawsuits premised on data analysis, with some characterizing the availability of claims data as a massive business opportunity. For example, Austin, Texas-based Integra Med Analytics LLC, which is led by a University of Texas Professor of Finance, holds itself out as an analytics firm that researches and investigates fraud, waste, and abuse in healthcare. Integra has filed a number of FCA lawsuits alleging that SNFs provided medically unnecessary therapy to Medicare beneficiaries; the lawsuits remain pending.

As claims data and similar information become increasingly available to analytics firms, providers should expect to see more opportunistic FCA cases brought based on data analytics and for traditional relators (such as employees or former employees) to seek to bolster their cases through publicly-available reimbursement data. These cases serve as an important reminder to providers to understand their own data because the government and relators certainly are endeavoring to do so to develop and enhance their own theories of liability. A provider’s proactive evaluation of their own data is not merely a defensive tool. Effective compliance programs routinely use data analytics to focus compliance efforts and assist with the allocation of compliance resources.      


No provider is immune from the possibility of government inquiry or the prospect of whistleblower lawsuits. A number of measures, however, can be taken to reduce the risk of civil, criminal or administrative investigations and resulting enforcement actions.

In light of the current crisis, providers should ensure that they know and understand the regulatory requirements associated with implementing a system of surveillance designed to identify possible infections before they can spread to other persons in facilities and when and to whom possible incidents of infections should be reported. Providers also should conduct voluntary self-assessments of their ability to prevent transmission of infections. The adequacy of staffing models and staff training should be evaluated to ensure effectiveness. Documentation of these and other proactive measures often will go a long way to rebut allegations that a provider failed to take reasonable steps to ensure that appropriate care was provided to residents and that reimbursement was properly sought for such care.    

Matt Curley is a member at Bass, Berry & Sims PLC and practices in the firm’s Compliance and Government Investigations practice group. He is an adjunct professor of law at Vanderbilt Law School, teaching healthcare fraud and abuse, and is a former assistant U.S. attorney. He can be reached at [email protected].