Articles Posted in Medicaid and Medicare Fraud

With the crossing into March, the official deadline for the “sequester” cuts took effect. That means that over the rest of the year a series of automatically spending cuts will hit many different areas of the federal government, ultimately totalling $85 billion this year alone. When discussing health care issues specifically, Medicare faces some smaller reductions but Medicaid is mostly untouched by the sequester. However, that can be somewhat misleading, because steep financial cuts to both program remain on the table for any compromise that might be reached in the coming months between the parties.

For that reason it remains critical for all of us to be vigilant about how funds are spent for these programs. Both Medicare and Medicaid funds are spent in different ways on nursing home care, but Medicaid constitutes the bulk of support for seniors (and others with various disabilities) who need long-term care.

Our attorneys continue to encourage all those with knowledge of fraudulent Medicaid claims to come forward and speak with a legal professional to learn how the law allows citizens to hold those committing these acts accountable.

When poor (or unnecessary) care is provided to seniors at long-term care facilities, it is not just senior and their loved ones who suffer. The truth is that all taxpayers are taken advantage of in those situations. The vast majority of elder care is paid for via Medicare and Medicaid funds. That means that all of us actually contribute to the payment for long-term care. When that care is substandard–or we are paying for services that aren’t actually needed–then all of us have a personal stake.

Considering that public budgets are stretched to the max, and significant cost cutting is always on the table, it is absolutely critical that unlawful billing of Medicare and Medicaid funds be addressed. That is exactly what federal officials intended when they passed the False Claims Act. The law includes qui tam provisions–also known as “whistleblower” provisions. Essentially, this means that there are incentives for those with knowledge of misspent funds at these facilities to come forward. The individuals who provide information ultimately receive a portion of the recovery of misspent funds via either a settlement or successful lawsuit.

$700,000 Example

The Wall Street Journal recently published an article that shed light on a widespread problem that plagues the care given to nursing home residents everywhere: corrupt deals between nursing home administrators and drug companies.

The article focuses on Joel Gemunder, the former CEO of Omnicare, the largest distributor of pharmaceuticals to nursing homes. Mr. Gemunder officially announced his retirement last week, taking almost $130 million in pension benefits on his way out. The amount is a staggering sum of money for a single individual, especially considering that the stock value of the company he is leaving dropped over 60% in his final years running the enterprise.

The mammoth pension amount is consistent with how Omnicare has prioritized values: cash over quality–profits over care. Over the course of its history, the company has even shown a willingness to break the law in order to make as much money as possible. A recent Chicago example has made headlines.

For many years, the Medicare Payment Advisory Commission has reported that the Medicare program overpays skilled nursing facilities (SNFs) for rehabilitation services and underpays SNFs for certain residents needing specialized services and skilled nursing care. Significant changes will be made to Medicare payment policy and rein in wasteful spending and overpayments. Many times SNFs are paid for services they do not provide. Additionally, the programs were supposed to be budget neutral, but SNFs placed more residents in the highest assessment categories which resulted in overpayments. To read more about the overpayment, please visit the center for Medicare advocacy’s website.

An audit says Illinois could be overcharging thousands of nursing home residents who rely on Medicaid to pay long-term care expenses. A report by the Auditor General shows that one patient was overcharged $9,204. The nursing home report says the state’s Healthcare and Family Services and Human Services departments are automatically applying increases in Social Security benefits to care; federal law allows patients to give the money to spouses still living at home. The program spans at least 57,000 residents at 750 nursing homes. The agencies contended they are updating computer programs, and that no actual clients have been affected. To read more about the nursing home misspending, please click the link.

Three people have been arrested following an investigation by the Medicare Fraud Control Unit. The attorney general announced that three nursing home administrators were arrested on charges that they were operating two different assisted living facilities without licenses. The office started getting complaints about the nursing home and launched an investigation. Two of the administrators face felony charges and the potential for up to five years in prison if convicted. Investigators say that one of the operators had a licensed facility, but it exceeded its capacity. She then placed the extra clients in an unlicensed facility and asked for Medicaid reimbursement. The woman also received a cease and desist order and faces three charges: operating and/or maintaining an assisted living facility without a license, Medicaid fraud and grand theft. Unlicensed facilities can pose a serious threat to the residents’ safety and well-being. If your loved one has been a resident in an unlicensed nursing home, find an Illinois lawyer. To read more about the Medicaid fraud, please click the link.

A nursing home resident filed a federal lawsuit alleging consumer fraud by a Milwaukee-based care chain with eight facilities in Minnesota. The suit was filed on behalf of as many as 1,400 residents of the eight Extendicare homes. The suit was filed by a woman who says Extendicare promises more than it can deliver, resulting in increased earnings yet poor care for residents and hundreds of rule violations in Minnesota. The suit alleges that state inspectors have cited the homes for 218 violations in the past two years. The state average is 10 violations per year. The class-action suit seeks restitution of approximately 40 percent of the fees paid by private-pay residents. Extendicare dismissed the allegations stating they were “false and misleading”. The suit states that Extindicare lured clients in by promises it could not provide, and sought out high-need residents to increase profits, regardless of whether they could meet their needs. Two months ago, a similar class-action lawsuit was filed in Seattle. To read the full story, click here.

An anonymous complaint brought federal investigators to an Illinois nursing home. The U.S. Department of Health and Human Services sent investigators from a Medicare/Medicaid fraud unit to the nursing home. The unannounced visit is part of an ongoing investigation which arose from an anonymous complaint. Illinois has a Medicaid Fraud Control Unit that investigates and prosecutes Medicaid provider fraud and incidences of patient abuse and neglect. The nursing home had faced closure earlier in the year after the state found several deficiencies and halted Medicare/Medicaid reimbursements for new patients until the deficiencies were corrected. Less than a week later, the state had cleared the nursing home after receiving a corrective-action plan. To read the full story, click here.

Health deficiencies continue to be found at a nursing home where residents are not being informed of their legal rights. In 2005, the U.S. Department of Health and Human Services inspected the nursing home and gave it an overall rating of needing corrections. Deficiencies in the quality of care, resident’s rights and physical environment were found and reportedly corrected but when the facility was inspected last year, it was found in compliance. However, a recent inspection found that the nursing home failed to inform residents of their legal rights, services and charges. The nursing home failed to tell each resident who can get Medicaid benefits about which items and services Medicaid covers and which the resident must pay for or even how to apply for Medicaid. The nursing home faces other charges as well, such as not informing patient’s families when they have been admitted to the hospital. To read the full story, click here.

The GAO has released a study on the results of federal monitoring surveys of state inspections in nursing homes. The federal government often contracts with state employees to perform annual compliance surveys which are a prerequisite to Medicare and Medicaid funding. The GAO’s report unfortunately contains some very troubling reports of nursing home abuse and neglect.

The study found that a substantial proportion of state inspectors and surveys miss deficiencies in nursing homes regularly, including malnutrition, severe bedsores, overuse of prescription medications and nursing home abuse and neglect. Some of these deficiencies are at the most dangerous levels and could cause immediate harm to nursing home residents. However, less serious noncompliance was more frequent: approximately 70% of state surveys missed at least one instance of low-level noncompliance.

Click to view the full text of the study or the abstract.
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