nursing homeOn June 22, 2021, the Office of the Inspector General for the U.S. Department of Health and Human Services (OIG-HHS) released a comprehensive report on the impact of COVID-19 on Medicare beneficiaries residing in nursing homes for 2020.  While the results may not be surprising, they are still disturbing.  Overall, the report paints a tragic picture of COVID-19 ravaging the nursing home population.

For example, the report finds that roughly forty-two percent of Medicare beneficiaries in nursing homes had or likely had COVID-19 – compared to only six percent of the population as a whole.  The report also determined that the overall mortality rate in nursing homes in 2020 was nearly one-third higher than it was in 2019.  Strikingly, almost 1,000 more Medicare beneficiaries died per day in April 2020 than they did in April 2019.  And while all age and ethnic groups were hit hard by the disease, the report found that nearly half of Black, Hispanic, and Asian Medicare beneficiaries had or likely had COVID-19, as compared to only slightly more than forty percent of White beneficiaries.

While the OIG-HHS report concludes that the data will be used prospectively to avert similar tragedies occurring in the future, the clear, if unwritten, implication of the report is that it will serve as a further basis for regulators and prosecutors to scrutinize and investigate nursing home operators.  As previously discussed on this blog (here and here), the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced the creation of the National Nursing Home Initiative (NNHI) in March 2020, coincident with the rise of COVID-19.  The stated purpose of the NNHI was to pursue criminal and civil enforcement actions against nursing homes that provide “grossly substandard care.”  However, by November 2020, the NNHI appeared to have floundered, with nursing homes passing government inspections with ease despite the pandemic, and overall being fined less than the prior year.

That soon could very well change, with the OIG-HHS report being the harbinger of more robust enforcement proceedings and investigations.  The report, and it’s devastating findings, comes just a few months after the new HHS secretary, former California Attorney General Xavier Becerra, was confirmed on March 18, 2021.  Prior to this, Becerra had established himself as an aggressive prosecutor of nursing home fraud and misconduct in California.  In fact, just days before he was confirmed, Becerra, alongside other government prosecutors, filed a newsworthy lawsuit against an operator of one of the nation’s largest nursing home chains.  The lawsuit alleges that the nursing home operator ignored laws designed to protect patient safety and provided false information to the Centers for Medicare & Medicaid.

Another sign that nursing homes may face increased scrutiny are DOJ’s focus on pursing False Claims Act (FCA) actions against nursing home operators.  For example, just last month, nursing home operator SavaSeniorCare LLC (Sava) agreed to settle allegations it violated the FCA by billing Medicare and Medicaid for grossly substandard skilled nursing services or for services that were not necessary by paying $11.2 million.  As is common with FCA cases, the Sava settlement resolves allegations of fraud arising from a complaint filed in 2015 and based on conduct that occurred a decade ago.

What this means is that it is likely that DOJ, OIG-HHS, and other regulators and prosecutors, may be spurred by the OIG-HHS report to investigate nursing homes for fraud out of their handling of the pandemic.  But given the enormity of COVID-19, affecting virtually every nursing home in the nation, and the complexity of FCA investigations generally, it may be months or years before we see the visible impact of those investigations.  This does not mean, of course, that nursing homes will get a free pass.  To the contrary, in remarks given publicly in December 2020, Deputy Assistant Attorney General Michael Granston reiterated that one of DOJ’s priorities included using the FCA as a basis to investigate and hold accountable nursing home operators – specifically emphasizing the NNHI and the “continuing evidence of deficient care being provided to our nation’s seniors.”

The OIG-HHS report released this week all but conclusively proves that COVID-19 took an immense toll on nursing homes and their residents.  The data in that report alone certainly is not a basis to prove that these nursing homes violated laws or regulations, including the FCA.  But it provides a strong basis for regulators and prosecutors to lay the foundations for investigating nursing home misconduct during the pandemic.  Even though the pandemic may be winding down, nursing home operators should expect to continue to be scrutinized and investigated for their actions during it for a long time.