Like all businesses, nursing homes must submit a bill for services rendered to the payer in order to be compensated for their services. What make nursing homes somewhat unusual is that unlike your average operation, nursing homes submit their charges to the U.S. Government for payment. Sure there are some ‘private pay’ patients at some facilities, but for the most part Uncle Sam foots the majority of patient bills. Despite all of the economic turmoil, nursing homes are still in the advantageous position of collecting from the government which (theoretically) is in a better position to pay than many private entities.
While it sounds like a relatively simple system– do the work, generate the bill, get paid for your services and everyone is happy? However, the process becomes a bit muddled because of the unique features about nursing homes in that the overwhelming amount of care they provide is behind closed doors and frequently to patients who may not be in a condition to properly articulate what care is– or is not— being provided to them.
At the very heart of nursing homes receiving government reimbursement is the understanding that the nursing home will actually provide the care it claims to be providing.
In the cases of a crooked nursing home operator, it can be virtually impossible to discover their deceitful acts without an informant on the inside who accurately record the facilities fraudulent practices. Even when invoices are copied and patient information is recorded, many acts of over-billing in the nursing home industry go unreported and un-prosecuted.
For all of the cases of abusive billing practices that may likely never see the light of day, I was refreshed to hear about a recent Qui Tam lawsuit against a nursing home in Illinois.
Two courageous nurses who worked at Momence Meadows Nursing Center reported their experiences of witnessing fraudulent billing practices at the facility to government officials who in turn conducted an investigation into how owners of the facility were providing care. After determining that the allegations of the nurses’ were well founded, the nurses were then permitted to pursue the matter against the nursing home on the government’s behalf in a case referred to as a false claims act lawsuit.
After hearing the evidence in this case, a jury in Federal Court of Southern Illinois reached a verdict against the former owner of the facility, Jacob Graff (now residing in Beverly Hills, CA). All told, the jury awarded approximately $28M based upon the fraudulent billing at the facility– billing for services either never provided or provided in an inferior manner. As individuals who initiated this fraudulent billing lawsuit, the nurses are entitled to a percentage of the verdict– reported to be approximately $7 million.
While I’m certain that this verdict will be appealed, I feel better knowing that other nursing home operators must surely be thinking twice before submitting another questionable invoice to the government.
Read more about this case of nursing home fraud here.