Just yesterday on this blog I wrote about the
Top 4 Surprises About 2014’s False Claims Act Cases, and I said I thought we were seeing a surprising new trend. It seemed
to me that the Government was taking a lot of cases it had not taken in
the past: cases against companies that contracted to provide services
to the Government, and did – but that provided the services in such
an appallingly poor manner that the Government (not even the Government!)
should have to pay for them.
Apparently I was right! Today the Government revealed the largest-ever
settlement for a case involving “failure of care.” Extendicare,
a national nursing home chain, will pay the Government $38 million to
resolve accusations that
Extendicare provided shoddy care to its residents.
Why Does This Matter?
So why is this such a big deal to a lawyer who represents whistleblower,
like I do? It all comes down to “proof.”
The Issue of Proof
According to traditional wisdom among FCA lawyers, the Government only
wants cases that are easy to prove. Let’s take an example. A doctor
bills for caring for a patient on June 5th. But he really was out of the
country on June 5th, and obviously didn’t treat the patient at all.
Hit that “Easy” button that Staples is always talking about!
On the other hand, if the doctor really did treat the patient on June
5th, and the allegation is just that he did not do a good job of treating
the patient, then the case is much harder to prove. The Government has
to delve into the subjective area of what is “good” or “good
enough”, as opposed to what is “not good” or “not
good enough.” The difficulty with making this kind of proof is magnified
in the healthcare field, because by definition medical treatment has to
be administered individually. In order for the Government to win, it has
to prove that the medical treatment the doctor provided was bad –
for a lot of individual patients.
But a few years ago the Government started giving lip service to the idea
that it was interested in taking False Claims Act cases where the defendant
was not just engaged in fraud – the defendant was engaged in fraud
that was causing patient harm. Many in the whistleblower field were skeptical;
proving patient harm by definition requires some individualized proof
that a patient was harmed. Many wondered — would the Government
really go the distance in that kind of case?
Is the Government Really Serious About Stopping Fraud that Causes Patient Harm?
Yesterday, when I did an overview of the False Claims Act cases from fiscal
year 2014 (which ironically ends on September 30th), I pointed out a surprising
fact: nearly 10% of the FCA cases that resolved last year involved accusations
that a Defendant contracted to provide something to the Government, but
did a poor job.
In the Extendicare case, two whistleblowers brought separate suits accusing
the nursing home of very serious failures in providing patient care. They
said that Extendicare was understaffing its facilities, was failing to
provide adequate care for patients who had catheters, and was failing
to follow its own procedures on how to prevent patients from developing
bedsores or falling.
Kudos to the Government, for following through on what it said was important.
These allegations are exactly the kind that show the appallingly lack
of care that the Department of Justice said it was committed to stopping.
Whistleblowers Will Be Rewarded
In recognition of the fact that they brought the Defendant’s behavior
to light and saved the taxpayers $38 million, the whistleblowers in the
Extendicare case are entitled to part of the Government’s recovery.
One of the whistleblowers will take home $1.8 million, the other more