Inadequate Staffing Levels

One of the fastest growing areas for long term health care litigation is inadequate staffing levels at Skilled Nursing Facilities (SNFs). As more SNFs are brought under the management of large corporations, there is increasing pressure to lower overhead and increase profits. The unfortunate result of understaffed facilities is that the medically-vulnerable and often incompetent residents receive substandard care and suffer severe bodily harm, falls, and even premature death. Facilities are continuously competing for residents and have been found to falsely advertise staffing levels.

California’s Health and Safety code Section 1276.5 require SNFs to provide a minimum of 3.2 direct care nursing staff hours per resident per day. Where there are perceived allegations of staffing violations, private individuals have taken up the cause and filed civil lawsuits rather than wait for the California Department of Public Health to take action. In recent years, California courts witnessed jury verdicts in the hundreds of millions. One such case was a 2010 jury award eclipsing the $671 million dollar mark for plaintiff SNF residents who alleged violations of the 3.2 hours requirement along with other related violations; the Skilled Healthcare Nursing Group subsequently settled for $62.8 million rather than appeal (Lavender, et al. v. Skilled Healthcare Group, Inc., et al. No. DR060264, Calif. Super., Humboldt Co., 2010).

This trend of elder abuse violations at SNFs may also be a springboard for further litigation under the False Claims Act (“FCA”). When combining headline-capturing cases involving elder abuse with the high likelihood for large financial recoveries, the stage is set for FCA cases stemming from substandard quality of care.

The False Claims Act

The federal FCA is one of the government’s primary tools to combat fraud, waste, and abuse in the Medicaid and Medicare programs. It forbids any person who:

(1) knowingly presents or causes to be presented, a false or fraudulent claim for payment or approval;

(2) knowingly makes, uses, or causes to be made or used, false records or statements to get false or fraudulent claims paid or approved by the government;

(3) conspires to defraud the government by getting a false or fraudulent claim paid or approved by the government; or

(4) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government (31 U.S.C. Sec. 3729.).

A violation may subject the wrongdoer to substantial penalties of $5,000-10,000 per violation plus treble damages sustained by the government. Typically, the government initiates criminal proceedings first and then continues with civil prosecution. At the core of FCA is the ability for private persons (aka whistleblowers/qui-tam relators) to file actions for the government. Then, while the action is under seal for 60 days, the government can choose to intervene either by litigation or settlement, or decline and allow the private lawsuit to proceed. If the government intervenes (preferred), the private person still receives a share (15-25%) of any recoveries. If the government declines (most common) the private person receives a higher percentage (25-30%) of any recovery (31 U.S.C. Sec. 3730 et seq.).

California’s FCA

The California FCA is modeled after the federal FCA. Moreover, in California, it is illegal to retaliate against employees who inform the government or law enforcement where those employees had reasonable cause to believe that the information revealed a violation or noncompliance with a state or federal statute or regulation (Labor Code Sec. 1102.5.). California also has statutes that protect health care workers and patients by prohibiting health care facilities from retaliating or discriminating against them for complaints about premises’ safety conditions or quality of care (Health and Safety Code Sec. 1278.5.). The purpose of the statute is to protect those who are charged with ensuring the health and safety of the patients as well as protecting the actual patients.

Since Medicare and Medicaid (Medi-Cal in California) reimburse SNFs for the care provided to its residents, any substandard care may lead to charges of presenting false claims to the government.

We’ve seen cases brought against SNFs alleging FCA violations for two decades. Often, the defendants settle with the government and submit to monitoring of the care and a comprehensive compliance program.