DOJ's Worthless Services Investigations of Long-Term Care Providers Continues

Last year, at a speech before the Taxpayers Against Fraud Education Fund Conference, Department of Justice Assistant Attorney General Leslie R. Caldwell announced a new DOJ policy for all new qui tam complaints. Caldwell stated that the Department’s civil and criminal prosecutors would review all new qui tam complaints simultaneously to determine whether parallel investigations are appropriate.

Criminal enforcement actions against long-term care providers for “worthless” or substandard care to residents have been on the rise recently, with a number of False Claim Act (FCA) cases brought by both federal and state government agencies against long-term care services providers.

In October 2014, the DOJ announced the largest settlement in its history involving a chain of skilled nursing facilities. The $38 million civil settlement with Extendicare Health Services, Inc. and its subsidiary, Progressive Step Corporation, resolved allegations that Extendicare had billed Medicaid and Medicare for “worthless” services — nursing services that were so substandard as to be deemed worthless — and rehabilitation services that were either medically unreasonable or unnecessary.

The case was brought to light via two separate qui tam actions filed by a former Extendicare supervisor and a former patient. The action was filed by the DOJ on behalf of the federal government and the attorneys general of eight of the 11 states where Extendicare operates (Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin). In addition to the $38 million civil settlement, Extendicare is required to comply with a Corporate Integrity Agreement entered into with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) for the next five years.

Based on this relatively new DOJ policy of scrutinizing qui tam complaints for potential parallel investigations, health care providers need to scrutinize their skilled staffing services and quality control processes to minimize the risk of potential worthless services prosecution.

Whether you are facing a serious federal white-collar prosecution, a state murder charge, or misdemeanor charges, The Cogdell Law Firm has the experience, knowledge and reputation you want for your legal team. When results matter most, contact Dan Cogdell at (713) 426-2244 or