Jury Awards $29 Million Against Nursing Home for False Claims Act Violations

An Illinois jury hit a skilled nursing facility (SNF) with a $29 million verdict after agreeing with allegations by former employees that the SNF knowingly provided worthless services to its residents and submitted over 1700 false claims to the government for their care. The jury found that the government suffered losses of over $3 million in connection with the false claims, which are trebled—or multiplied by three— under the False Claims Act. For each of the 1700-plus false claims, the jury awarded the maximum civil penalty of $11,000. The jury also awarded the two former employee whistleblowers a total of over $400,000 in damages.

The case was filed by two nurses who had worked at the SNF and alleged that they had repeatedly complained to management about the poor care provided to residents and of violations of the False Claims Act. Among other allegations, the two whistleblowers said in their complaint that residents routinely went without medical care and food as well as the prescribed medications needed for their mental and physical well-being and to alleviate pain. In addition, the whistleblowers alleged that the SNF destroyed and forged records in order to make it appear that residents received appropriate care, instructed staff to either not enter negative information or alter entries regarding negative aspects of patient care, and forged staffing sheets to conceal inadequate staffing at the facility.

While this case presents an extreme example, it also highlights the importance of responding promptly to employee complaints of potential False Claims Act violations. As we wrote last month, federal law requires nursing facilities and skilled nursing facilities to have in place robust compliance programs by March 23, 2013. A compliance program containing the elements required by this law would include mechanisms for responding to internal complaints like those made by the whistleblowers in this case.