The federal government notched the second highest number of False Claims Act settlements in history and judgments in the last fiscal year, and two legal experts said the long-term care industry should be warned that that pace will likely continue. 

The Department of Justice announced that settlements and judgments in False Claims Act cases exceeded $2.2 billion with the vast majority — $1.7 billion — stemming from healthcare cases. In addition, the department’s press release noted that $1.9 billion of the total was related to qui tam, or whistleblower, cases.

The lengthy release detailed several high-profile cases, including several involving nursing homes and senior care, and the categories under which the Department of Justice pursued them. The department highlighted the case against American Health Foundation and three affiliated facilities — Cheltenham Nursing and Rehabilitation Center in Philadelphia, PA; the Sanctuary at Wilmington Place in Dayton, OH; and Samaritan Care Center and Villa in Medina, OH – for providing “grossly substandard skilled nursing services” between 2016 and 2018. 

Mysty Blagg, an attorney with Shipman & Wright LLP who is a former healthcare compliance investigator, said the releases tend to highlight the enforcement agency’s priorities. She said the release highlighted a case involving cybersecurity so nursing home operators should take the hint and focus on protecting patient personal and medical data. 

“They don’t seem to be decreasing the emphasis on nursing homes,” she said, adding that President Joe Biden’s mention of holding nursing homes accountable in last Tuesday’s State of the Union address is also a signal. “If we read the tea leaves and piece that together with the audits on the rate of the use of anti-psychotics, they’re still interested in nursing homes and seeing if they’re providing quality care to residents.”

Qui tam cases may become a more significant threat for the operators of skilled nursing facilities. Blagg said there are “a lot of disgruntled” nurses who are doing more work with fewer resources. The growing frustration of employers not listening to them can lead to situations where they feel it necessary to become whistleblowers. 

Attorney Matthew J. Murer, who chairs the Health Care, Public Policy, and Government Investigations Department Chair at Polsinelli PC, said he cautions clients to pay attention to what employees are reporting internally.

“If a complaint is filed through a complaint line and you don’t respond and don’t engage, frustrated people leave and go to an attorney and say, ‘I wasn’t listened to,’” he said.

The Justice Department’s press release noted that whistleblowers filed 652 qui tam lawsuits in fiscal year 2022. 

While Murer doesn’t expect there to be a sudden increase in the number of lawsuits filed against nursing home operators in general, he said that investigators will continue to pursue those cases aggressively. Providers should expect that any case against them will include some analysis of how they used funding from the CARES Act, the first legislation targeting economic relief from the pandemic signed into in March 2020, and from the Paycheck Protection Program. 

Given the myriad problems the sector is facing from labor shortages, Medicaid reimbursements that are not keeping pace with inflation, and a looming federal staffing mandate, Murer said the challenges providers face are “above and beyond.”

“I’ve never seen industry face the array and depth of challenges they have right now,” he added.