fall2015 newsletter proof“we believe that frequent claim denials should alert the provider that...

10
4 ATTORNEY GENERAL UPDATE Inside this issue 4 5-6 Your Resident’s Legal Representative The Quarterly Capozzi Adler, P.C. Attorneys at Law Glenn A Parno, Esquire- [email protected] PENNSYLVANIA ATTORNEY GENERAL FILES CONSUMER PROTECTION COMPLAINT AGAINST GOLDEN LIVING NURSING FACILITIES 1 On July 1, 2015, the Pennsylvania Attorney General took the unprecedented action of filing a Civil Complaint against Golden Gate National Senior Care alleging that 14 “Golden Living” nursing facilities located throughout the state committed violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Complaint also alleges breach of contract and unjust enrichment claims against Golden Gate and seeks an injunction prohibiting Golden Gate from engaging in further deceptive and unlawful conduct. Pursuant to the provisions of the Consumer Protection Law, the Attorney General is seeking penalties against Golden Gate ranging from $1,000.00 to $3,000.00 per violation. Additionally, the Consumer Protec- tion Law allows for the Attorney General to recover treble (triple) damages and attorney’s fees against Golden Gate. In light of the number of violations alleged in the Complaint, the potential damages are staggering. In September, the Attorney General- amended the Complaint to add claims for alleged violations at an additional 11 Golden Living facilities based on over 350 consumer complaints received after the filing of the original Complaint. Interestingly, the case against Golden Gate was developed with the help of the Cohen, Milstein, Sellers & Toll law firm in Washington, D.C. Apparently, the firm will be entitled to 21 percent of any monies recovered by the Com- monwealth. e use of private counsel to assist the Attorney General’s Office with a civil lawsuit is not unique, but remains controversial. Obvi- ously, there is a financial incentive for a law firm to over reach with respect to identifying and pursuing regulatory violations if it is entitled to a portion of the fines. Although not a defense to the current lawsuit, the financial interest of Cohen, Milstein, Sellers & Toll in the ultimate outcome of this matter is potentially a powerful argument to sway a jury. Criminal vs. Civil Liability e charges against Golden Living were investi- gated and prosecuted by the Attorney General’s Civil Division, specifically the Consumer Protec- tion Section, rather than the Medicaid Fraud Control Unit of the Criminal Division. is is Same-Sex Marriage & Property Law Update on Staffing Agency Employees Capozzi Adler, P.C. Attorneys at Law www.capozziadler.com

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4

ATTORNEY GENERALUPDATE

Inside this issue

4

5-6

Your Resident’s Legal Representative

The QuarterlyCapozzi Adler, P.C. Attorneys at Law

Glenn A Parno, Esquire- [email protected]

PENNSYLVANIA ATTORNEY GENERAL FILES CONSUMER PROTECTION COMPLAINT AGAINST GOLDEN LIVING NURSING FACILITIES

ly the most serious of abuses;” that it is “not targeted toward honest providers and suppliers t

1

On July 1, 2015, the PennsylvaniaAttorney General took the unprecedented action of �ling a Civil Complaint against Golden Gate National Senior Care alleging that 14 “Golden Living” nursing facilities located throughout the state committed violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Complaint also alleges breach of contract and unjust enrichment claims against Golden Gate and seeks an injunction prohibiting Golden Gate from engaging in further deceptive and unlawful conduct. Pursuant to the provisions of the Consumer Protection Law, the Attorney General is seeking penalties against Golden Gate ranging from $1,000.00 to $3,000.00 per violation. Additionally, the Consumer Protec-tion Law allows for the Attorney General to recover treble (triple) damages and attorney’s fees against Golden Gate. In light of the number of violations alleged in the Complaint, the potential damages are staggering. In September, the Attorney General-amended the Complaint to add claims for alleged violations at an additional 11 Golden Living facilities based on over 350 consumer

complaints received after the �ling of the original Complaint. Interestingly, the case against Golden Gate was developed with the help of the Cohen, Milstein, Sellers & Toll law �rm in Washington, D.C. Apparently, the �rm will be entitled to 21 percent of any monies recovered by the Com-monwealth. �e use of private counsel to assist the Attorney General’s O�ce with a civil lawsuit is not unique, but remains controversial. Obvi-ously, there is a �nancial incentive for a law �rm to over reach with respect to identifying and pursuing regulatory violations if it is entitled to a portion of the �nes. Although not a defense to the current lawsuit, the �nancial interest of Cohen, Milstein, Sellers & Toll in the ultimate outcome of this matter is potentially a powerful argument to sway a jury.

Criminal vs. Civil Liability

�e charges against Golden Living were investi-gated and prosecuted by the Attorney General’s Civil Division, speci�cally the Consumer Protec-tion Section, rather than the Medicaid Fraud Control Unit of the Criminal Division. �is is

surprising since much of the misconduct alleged in the Complaint could have easily formed the basis for criminal violations of the Pennsylvania Crimes Code or Medicaid Fraud and Abuse Act. For instance, the Complaint alleges that Golden Living, “engaged in a pervasive, chain-wide practice of billing consumers and the Common-wealth for services not provided” and made “deceptive, misleading, and unfair represen-tations” regarding services available and provided. �ese allegations could readily provide a basis for charges of theft, theft by deception, criminal conspiracy, and even corrupt organizations (the state version of the federal Racketeer In�uenced and Corrupt Organizations (RICO) Act). At one point, the Complaint makes the startling allegation that Golden Living falsi�ed resident records to cover up omissions of care. �is allegation could easily form the basis for a criminal charge of tampering with public records or unsworn falsi�cation to authorities. Additionally, the allegations of omissions of care with respect to nursing home residents could arguably support a criminal charge of reckless endangerment. Nonetheless, the Attorney General opted to pursue a civil action rather than a criminal action against Golden Living. �e rationale for this decision could be based on the fact that the Attorney General’s burden of proof in a civil action (preponderance of evidence) is much lower than the burden of proof in a criminal action (beyond a reasonable doubt). Additionally, monetary damages are more readily available and enhanced under the Consumer Protection Law as opposed to the applicable state criminal statutes. Interestingly, the Attor-ney General did not pursue this matter pursuant to the civil provisions of the Medicaid Fraud and Abuse Act, 62 P.S. 1407. Again, this decision was probably based on the higher burden of proof of intent which the Attorney General deter-mined would be best to avoid. It should also be noted that civil and criminal actions are not mutually exclusive and “parallel proceedings” could have been

pursued by the Attorney General. In essence, the Attorney General could legally have brought both civil and criminal actions against Golden Living for the same conduct at issue. Finally, nursing facilities are subject to federal penalties for submit-ting false claims for poor quality care under the False Claims Act, 31 U.S.C. §§ 3729 - 3733. �at statute provides for payment of a civil penalty of between $5,500 and $11,000 for each false claim knowingly submitted. Accordingly, the allegations brought by the Attorney General against Golden Living with respect to poor patient care could arguably be actionable under the False Claims Act as well.

Sources of Information

It appears as though the Attorney General relied upon several di�erent information sources to conduct its investigation of Golden Living’s conduct:

(1) Former Employees of the Corporation—�e Complaint references 16 unidenti�ed former employees of Golden Living’s facilities and bases many of its claims on information provided by those individuals. Former employ-ees of an organization are often valuable sources of information for government investigators. Of special interest are employees who separated service on less than favorable terms. �ese individuals are often anxious to provide incriminating information against their former employer. Unfortu-nately, disgruntled employees often embellish and sometimes manu-facture information they perceive to be “helpful” to the government and detrimental to their previous employer. Former employees are

typically not candidates for legal representation by corporate counsel and are rarely represented by private counsel when speaking with government investigators. Accordingly, the government has unfettered access to former employees and carte blanch to ask any questions in whatever form it desires. Although there is nothing that can be done to prevent former employees from providing inaccu-rate information to government investigators, there are measures that a facility can implement to limit the usefulness of this information. Although it doesn’t appear that investigators interviewed current Golden Living employees, it is not unusual for such inter-views to be conducted during the course of a civil or criminal investigation. If a nursing facility is aware that a government investigation is ongoing, steps should be taken to (1) ensure that current employees are represented by counsel before they are inter-viewed, and (2) ensure that the government entity conducting the investigation receives written notice of said legal representation. It is highly unlikely that a current employee, even a low level sta� member, will be interviewed without counsel present if the investigator knows the employee has counsel.

residents are a potential source of valuable information for government investigators as they often have extensive �rst-hand knowledge of the operations of a nursing facility. Unfortunately, family members who are dissatis�ed with quality of care, cost of care, sta� members, or any other care related issue, may be inclined to embellish or manufactur-er problems at the facility when interviewed by investigators. It is di�cult to prevent family members from providing damaging informa-tion during a government investiga-tion. Again, there are measures that a facility can implement to limit the usefulness of this information.

(3) Self-reported Information -- �e Complaint identi�es self-reported sta�ng levels as a source of infor-mation forming the basis for the allegations against Golden Living. Not surprisingly, information voluntarily supplied by a nursing facility to the state or federal government is often utilized by investigators as the basis for an enforcement action. Consequently, nursing facilities should ensure that any information supplied to the government is complete and accurate, no matter how innocuous that information may appear. It is entirely possible that Golden Living unwittingly under reported its sta�ng levels to state and federal authorities during annual licensure surveys. However, attempting to raise that argument as a defense at trial is problematic. Consequently, compliance measures, including periodic internal audits, should be implemented to ensure that any and all information reported to the government is complete, timely and

accurate. If an internal audit identi�es errors or omissions with respect to self-reported data, immediate remedial measures should be taken.

(4) Department of Health (DOH) Survey Results – De�ciencies identi�ed by the DOH during periodic surveys (inspections) of Golden Living’s facilities appear to have played a prominent role in the Attorney General’s investiga-tion and are cited repeatedly in the Civil Complaint. �is fact underscores the need for a nursing facility to pay careful attention to survey results and challenge �ndings that are inaccurate. Although most survey de�ciencies are resolved with the payment of a monetary penalty, these uncontest-ed de�ciencies become part of a facility’s compliance history which is readily available to both the government and the general public. Additionally, there is a danger that uncontested de�cien-cies may be deemed “admitted” by the facility for purposes of subsequent legal actions. In the case of Golden Living, it is possible that many of the de�cien-cies cited by the Attorney General could have been successfully challenged. However, it could prove di�cult for Golden Living to dispute the accuracy of these de�ciencies at trial since the de�ciencies were not disputed in the �rst instance. If a facility is not willing or able to challenge a de�ciency and chooses instead to pay a monetary penalty, there are strategies available to limit the government’s ability to use the de�ciencies against the facility in a subsequent, unrelated proceeding.

Conclusion

In light of the positive public reaction to the Attorney General’s lawsuit against Golden Living, as well as the likelihood of a signi�cant monetary award, it is very likely that the Attor-ney General will continue to pursue consumer protection and/or criminal actions against nursing facilities in Pennsylvania. Consequently, it is imperative that facilities have compli-ance policies and strategies in place to help them avoid government investiga-tions in the �rst place, and to limit their exposure with regard to govern-ment investigations that have already been initiated. Capozzi Adler, P.C. has a highly quali�ed sta� of attorneys experienced with issues speci�c to nursing home operations, as well as attorneys with prior experience conducting govern-ment investigations, and will be happy to review your facility’s current compliance policies to assess the level of protection a�orded in the current aggressive regulatory [email protected]

(2) Family Members of Current and Former Residents – �e Com-plaint also cites three unnamed relatives of Golden Living residents as having provided information regarding poor quality of care at Golden Living’s facilities. Family members of

Same-Sex Marriage& Property Law

Update on StaffingAgency Employees

Capozzi Adler, P.C.Attorneys at Law

www.capozziadler.com

“We believe that frequent claim denials should alert the provider that there may be an issue with its claim submission and that remedial action may be required. We do not believe that an interim noti�cation from CMS (for example, a “warning letter”) should be a prerequisite for taking action under § 424.535(a)(8)(ii). Further, if the provider has questions regarding CMS’s billing and coding requirements, it should review CMS’s manuals, educational articles, and other informational documents at CMS’s Web site (www.cms.hhs.gov); the provider may also contact its local MAC if it has additional questions.”

2

On July 1, 2015, the PennsylvaniaAttorney General took the unprecedented action of �ling a Civil Complaint against Golden Gate National Senior Care alleging that 14 “Golden Living” nursing facilities located throughout the state committed violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Complaint also alleges breach of contract and unjust enrichment claims against Golden Gate and seeks an injunction prohibiting Golden Gate from engaging in further deceptive and unlawful conduct. Pursuant to the provisions of the Consumer Protection Law, the Attorney General is seeking penalties against Golden Gate ranging from $1,000.00 to $3,000.00 per violation. Additionally, the Consumer Protec-tion Law allows for the Attorney General to recover treble (triple) damages and attorney’s fees against Golden Gate. In light of the number of violations alleged in the Complaint, the potential damages are staggering. In September, the Attorney General-amended the Complaint to add claims for alleged violations at an additional 11 Golden Living facilities based on over 350 consumer

complaints received after the �ling of the original Complaint. Interestingly, the case against Golden Gate was developed with the help of the Cohen, Milstein, Sellers & Toll law �rm in Washington, D.C. Apparently, the �rm will be entitled to 21 percent of any monies recovered by the Com-monwealth. �e use of private counsel to assist the Attorney General’s O�ce with a civil lawsuit is not unique, but remains controversial. Obvi-ously, there is a �nancial incentive for a law �rm to over reach with respect to identifying and pursuing regulatory violations if it is entitled to a portion of the �nes. Although not a defense to the current lawsuit, the �nancial interest of Cohen, Milstein, Sellers & Toll in the ultimate outcome of this matter is potentially a powerful argument to sway a jury.

Criminal vs. Civil Liability

�e charges against Golden Living were investi-gated and prosecuted by the Attorney General’s Civil Division, speci�cally the Consumer Protec-tion Section, rather than the Medicaid Fraud Control Unit of the Criminal Division. �is is

surprising since much of the misconduct alleged in the Complaint could have easily formed the basis for criminal violations of the Pennsylvania Crimes Code or Medicaid Fraud and Abuse Act. For instance, the Complaint alleges that Golden Living, “engaged in a pervasive, chain-wide practice of billing consumers and the Common-wealth for services not provided” and made “deceptive, misleading, and unfair represen-tations” regarding services available and provided. �ese allegations could readily provide a basis for charges of theft, theft by deception, criminal conspiracy, and even corrupt organizations (the state version of the federal Racketeer In�uenced and Corrupt Organizations (RICO) Act). At one point, the Complaint makes the startling allegation that Golden Living falsi�ed resident records to cover up omissions of care. �is allegation could easily form the basis for a criminal charge of tampering with public records or unsworn falsi�cation to authorities. Additionally, the allegations of omissions of care with respect to nursing home residents could arguably support a criminal charge of reckless endangerment. Nonetheless, the Attorney General opted to pursue a civil action rather than a criminal action against Golden Living. �e rationale for this decision could be based on the fact that the Attorney General’s burden of proof in a civil action (preponderance of evidence) is much lower than the burden of proof in a criminal action (beyond a reasonable doubt). Additionally, monetary damages are more readily available and enhanced under the Consumer Protection Law as opposed to the applicable state criminal statutes. Interestingly, the Attor-ney General did not pursue this matter pursuant to the civil provisions of the Medicaid Fraud and Abuse Act, 62 P.S. 1407. Again, this decision was probably based on the higher burden of proof of intent which the Attorney General deter-mined would be best to avoid. It should also be noted that civil and criminal actions are not mutually exclusive and “parallel proceedings” could have been

pursued by the Attorney General. In essence, the Attorney General could legally have brought both civil and criminal actions against Golden Living for the same conduct at issue. Finally, nursing facilities are subject to federal penalties for submit-ting false claims for poor quality care under the False Claims Act, 31 U.S.C. §§ 3729 - 3733. �at statute provides for payment of a civil penalty of between $5,500 and $11,000 for each false claim knowingly submitted. Accordingly, the allegations brought by the Attorney General against Golden Living with respect to poor patient care could arguably be actionable under the False Claims Act as well.

Sources of Information

It appears as though the Attorney General relied upon several di�erent information sources to conduct its investigation of Golden Living’s conduct:

(1) Former Employees of the Corporation—�e Complaint references 16 unidenti�ed former employees of Golden Living’s facilities and bases many of its claims on information provided by those individuals. Former employ-ees of an organization are often valuable sources of information for government investigators. Of special interest are employees who separated service on less than favorable terms. �ese individuals are often anxious to provide incriminating information against their former employer. Unfortu-nately, disgruntled employees often embellish and sometimes manu-facture information they perceive to be “helpful” to the government and detrimental to their previous employer. Former employees are

typically not candidates for legal representation by corporate counsel and are rarely represented by private counsel when speaking with government investigators. Accordingly, the government has unfettered access to former employees and carte blanch to ask any questions in whatever form it desires. Although there is nothing that can be done to prevent former employees from providing inaccu-rate information to government investigators, there are measures that a facility can implement to limit the usefulness of this information. Although it doesn’t appear that investigators interviewed current Golden Living employees, it is not unusual for such inter-views to be conducted during the course of a civil or criminal investigation. If a nursing facility is aware that a government investigation is ongoing, steps should be taken to (1) ensure that current employees are represented by counsel before they are inter-viewed, and (2) ensure that the government entity conducting the investigation receives written notice of said legal representation. It is highly unlikely that a current employee, even a low level sta� member, will be interviewed without counsel present if the investigator knows the employee has counsel.

residents are a potential source of valuable information for government investigators as they often have extensive �rst-hand knowledge of the operations of a nursing facility. Unfortunately, family members who are dissatis�ed with quality of care, cost of care, sta� members, or any other care related issue, may be inclined to embellish or manufactur-er problems at the facility when interviewed by investigators. It is di�cult to prevent family members from providing damaging informa-tion during a government investiga-tion. Again, there are measures that a facility can implement to limit the usefulness of this information.

(3) Self-reported Information -- �e Complaint identi�es self-reported sta�ng levels as a source of infor-mation forming the basis for the allegations against Golden Living. Not surprisingly, information voluntarily supplied by a nursing facility to the state or federal government is often utilized by investigators as the basis for an enforcement action. Consequently, nursing facilities should ensure that any information supplied to the government is complete and accurate, no matter how innocuous that information may appear. It is entirely possible that Golden Living unwittingly under reported its sta�ng levels to state and federal authorities during annual licensure surveys. However, attempting to raise that argument as a defense at trial is problematic. Consequently, compliance measures, including periodic internal audits, should be implemented to ensure that any and all information reported to the government is complete, timely and

accurate. If an internal audit identi�es errors or omissions with respect to self-reported data, immediate remedial measures should be taken.

(4) Department of Health (DOH) Survey Results – De�ciencies identi�ed by the DOH during periodic surveys (inspections) of Golden Living’s facilities appear to have played a prominent role in the Attorney General’s investiga-tion and are cited repeatedly in the Civil Complaint. �is fact underscores the need for a nursing facility to pay careful attention to survey results and challenge �ndings that are inaccurate. Although most survey de�ciencies are resolved with the payment of a monetary penalty, these uncontest-ed de�ciencies become part of a facility’s compliance history which is readily available to both the government and the general public. Additionally, there is a danger that uncontested de�cien-cies may be deemed “admitted” by the facility for purposes of subsequent legal actions. In the case of Golden Living, it is possible that many of the de�cien-cies cited by the Attorney General could have been successfully challenged. However, it could prove di�cult for Golden Living to dispute the accuracy of these de�ciencies at trial since the de�ciencies were not disputed in the �rst instance. If a facility is not willing or able to challenge a de�ciency and chooses instead to pay a monetary penalty, there are strategies available to limit the government’s ability to use the de�ciencies against the facility in a subsequent, unrelated proceeding.

Conclusion

In light of the positive public reaction to the Attorney General’s lawsuit against Golden Living, as well as the likelihood of a signi�cant monetary award, it is very likely that the Attor-ney General will continue to pursue consumer protection and/or criminal actions against nursing facilities in Pennsylvania. Consequently, it is imperative that facilities have compli-ance policies and strategies in place to help them avoid government investiga-tions in the �rst place, and to limit their exposure with regard to govern-ment investigations that have already been initiated. Capozzi Adler, P.C. has a highly quali�ed sta� of attorneys experienced with issues speci�c to nursing home operations, as well as attorneys with prior experience conducting govern-ment investigations, and will be happy to review your facility’s current compliance policies to assess the level of protection a�orded in the current aggressive regulatory [email protected]

(2) Family Members of Current and Former Residents – �e Com-plaint also cites three unnamed relatives of Golden Living residents as having provided information regarding poor quality of care at Golden Living’s facilities. Family members of

3

On July 1, 2015, the PennsylvaniaAttorney General took the unprecedented action of �ling a Civil Complaint against Golden Gate National Senior Care alleging that 14 “Golden Living” nursing facilities located throughout the state committed violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Complaint also alleges breach of contract and unjust enrichment claims against Golden Gate and seeks an injunction prohibiting Golden Gate from engaging in further deceptive and unlawful conduct. Pursuant to the provisions of the Consumer Protection Law, the Attorney General is seeking penalties against Golden Gate ranging from $1,000.00 to $3,000.00 per violation. Additionally, the Consumer Protec-tion Law allows for the Attorney General to recover treble (triple) damages and attorney’s fees against Golden Gate. In light of the number of violations alleged in the Complaint, the potential damages are staggering. In September, the Attorney General-amended the Complaint to add claims for alleged violations at an additional 11 Golden Living facilities based on over 350 consumer

complaints received after the �ling of the original Complaint. Interestingly, the case against Golden Gate was developed with the help of the Cohen, Milstein, Sellers & Toll law �rm in Washington, D.C. Apparently, the �rm will be entitled to 21 percent of any monies recovered by the Com-monwealth. �e use of private counsel to assist the Attorney General’s O�ce with a civil lawsuit is not unique, but remains controversial. Obvi-ously, there is a �nancial incentive for a law �rm to over reach with respect to identifying and pursuing regulatory violations if it is entitled to a portion of the �nes. Although not a defense to the current lawsuit, the �nancial interest of Cohen, Milstein, Sellers & Toll in the ultimate outcome of this matter is potentially a powerful argument to sway a jury.

Criminal vs. Civil Liability

�e charges against Golden Living were investi-gated and prosecuted by the Attorney General’s Civil Division, speci�cally the Consumer Protec-tion Section, rather than the Medicaid Fraud Control Unit of the Criminal Division. �is is

surprising since much of the misconduct alleged in the Complaint could have easily formed the basis for criminal violations of the Pennsylvania Crimes Code or Medicaid Fraud and Abuse Act. For instance, the Complaint alleges that Golden Living, “engaged in a pervasive, chain-wide practice of billing consumers and the Common-wealth for services not provided” and made “deceptive, misleading, and unfair represen-tations” regarding services available and provided. �ese allegations could readily provide a basis for charges of theft, theft by deception, criminal conspiracy, and even corrupt organizations (the state version of the federal Racketeer In�uenced and Corrupt Organizations (RICO) Act). At one point, the Complaint makes the startling allegation that Golden Living falsi�ed resident records to cover up omissions of care. �is allegation could easily form the basis for a criminal charge of tampering with public records or unsworn falsi�cation to authorities. Additionally, the allegations of omissions of care with respect to nursing home residents could arguably support a criminal charge of reckless endangerment. Nonetheless, the Attorney General opted to pursue a civil action rather than a criminal action against Golden Living. �e rationale for this decision could be based on the fact that the Attorney General’s burden of proof in a civil action (preponderance of evidence) is much lower than the burden of proof in a criminal action (beyond a reasonable doubt). Additionally, monetary damages are more readily available and enhanced under the Consumer Protection Law as opposed to the applicable state criminal statutes. Interestingly, the Attor-ney General did not pursue this matter pursuant to the civil provisions of the Medicaid Fraud and Abuse Act, 62 P.S. 1407. Again, this decision was probably based on the higher burden of proof of intent which the Attorney General deter-mined would be best to avoid. It should also be noted that civil and criminal actions are not mutually exclusive and “parallel proceedings” could have been

pursued by the Attorney General. In essence, the Attorney General could legally have brought both civil and criminal actions against Golden Living for the same conduct at issue. Finally, nursing facilities are subject to federal penalties for submit-ting false claims for poor quality care under the False Claims Act, 31 U.S.C. §§ 3729 - 3733. �at statute provides for payment of a civil penalty of between $5,500 and $11,000 for each false claim knowingly submitted. Accordingly, the allegations brought by the Attorney General against Golden Living with respect to poor patient care could arguably be actionable under the False Claims Act as well.

Sources of Information

It appears as though the Attorney General relied upon several di�erent information sources to conduct its investigation of Golden Living’s conduct:

(1) Former Employees of the Corporation—�e Complaint references 16 unidenti�ed former employees of Golden Living’s facilities and bases many of its claims on information provided by those individuals. Former employ-ees of an organization are often valuable sources of information for government investigators. Of special interest are employees who separated service on less than favorable terms. �ese individuals are often anxious to provide incriminating information against their former employer. Unfortu-nately, disgruntled employees often embellish and sometimes manu-facture information they perceive to be “helpful” to the government and detrimental to their previous employer. Former employees are

typically not candidates for legal representation by corporate counsel and are rarely represented by private counsel when speaking with government investigators. Accordingly, the government has unfettered access to former employees and carte blanch to ask any questions in whatever form it desires. Although there is nothing that can be done to prevent former employees from providing inaccu-rate information to government investigators, there are measures that a facility can implement to limit the usefulness of this information. Although it doesn’t appear that investigators interviewed current Golden Living employees, it is not unusual for such inter-views to be conducted during the course of a civil or criminal investigation. If a nursing facility is aware that a government investigation is ongoing, steps should be taken to (1) ensure that current employees are represented by counsel before they are inter-viewed, and (2) ensure that the government entity conducting the investigation receives written notice of said legal representation. It is highly unlikely that a current employee, even a low level sta� member, will be interviewed without counsel present if the investigator knows the employee has counsel.

residents are a potential source of valuable information for government investigators as they often have extensive �rst-hand knowledge of the operations of a nursing facility. Unfortunately, family members who are dissatis�ed with quality of care, cost of care, sta� members, or any other care related issue, may be inclined to embellish or manufactur-er problems at the facility when interviewed by investigators. It is di�cult to prevent family members from providing damaging informa-tion during a government investiga-tion. Again, there are measures that a facility can implement to limit the usefulness of this information.

(3) Self-reported Information -- �e Complaint identi�es self-reported sta�ng levels as a source of infor-mation forming the basis for the allegations against Golden Living. Not surprisingly, information voluntarily supplied by a nursing facility to the state or federal government is often utilized by investigators as the basis for an enforcement action. Consequently, nursing facilities should ensure that any information supplied to the government is complete and accurate, no matter how innocuous that information may appear. It is entirely possible that Golden Living unwittingly under reported its sta�ng levels to state and federal authorities during annual licensure surveys. However, attempting to raise that argument as a defense at trial is problematic. Consequently, compliance measures, including periodic internal audits, should be implemented to ensure that any and all information reported to the government is complete, timely and

accurate. If an internal audit identi�es errors or omissions with respect to self-reported data, immediate remedial measures should be taken.

(4) Department of Health (DOH) Survey Results – De�ciencies identi�ed by the DOH during periodic surveys (inspections) of Golden Living’s facilities appear to have played a prominent role in the Attorney General’s investiga-tion and are cited repeatedly in the Civil Complaint. �is fact underscores the need for a nursing facility to pay careful attention to survey results and challenge �ndings that are inaccurate. Although most survey de�ciencies are resolved with the payment of a monetary penalty, these uncontest-ed de�ciencies become part of a facility’s compliance history which is readily available to both the government and the general public. Additionally, there is a danger that uncontested de�cien-cies may be deemed “admitted” by the facility for purposes of subsequent legal actions. In the case of Golden Living, it is possible that many of the de�cien-cies cited by the Attorney General could have been successfully challenged. However, it could prove di�cult for Golden Living to dispute the accuracy of these de�ciencies at trial since the de�ciencies were not disputed in the �rst instance. If a facility is not willing or able to challenge a de�ciency and chooses instead to pay a monetary penalty, there are strategies available to limit the government’s ability to use the de�ciencies against the facility in a subsequent, unrelated proceeding.

Conclusion

In light of the positive public reaction to the Attorney General’s lawsuit against Golden Living, as well as the likelihood of a signi�cant monetary award, it is very likely that the Attor-ney General will continue to pursue consumer protection and/or criminal actions against nursing facilities in Pennsylvania. Consequently, it is imperative that facilities have compli-ance policies and strategies in place to help them avoid government investiga-tions in the �rst place, and to limit their exposure with regard to govern-ment investigations that have already been initiated. Capozzi Adler, P.C. has a highly quali�ed sta� of attorneys experienced with issues speci�c to nursing home operations, as well as attorneys with prior experience conducting govern-ment investigations, and will be happy to review your facility’s current compliance policies to assess the level of protection a�orded in the current aggressive regulatory [email protected]

(2) Family Members of Current and Former Residents – �e Com-plaint also cites three unnamed relatives of Golden Living residents as having provided information regarding poor quality of care at Golden Living’s facilities. Family members of

Earlier this summer, the Supreme Court paved the way for same-sex couples to legally marry in all 50 states. �is was not only a watershed moment in civil rights law, but property law as well. Previously, same-sex couples that wanted to purchase property together had the choice of taking title either as tenants in common, or as joint tenants with the right of survivorship. While taking title as joint tenants allows for the automatic transfer of title in the event of the death of one of the title holders, it is a lesser “strength” title mechanism when

4

Nicholas Luciano, Esquire - [email protected]

I NOW PRONOUNCE YOU TENANTS BY THE ENTIRETIES: HOW SAME-SEX MARRIAGE IS AFFECTING PROPERTY LAW.

NLRB RULES STAFFING AGENCY EMPLOYEES ARE EMPLOYEES OF

Brandon Williams, Esquire – [email protected]

Both the Agency and the Healthcare Organization Where They Work

compared to holding title as tenants by the entireties—a designation reserved strictly for married couples. Tenants by the entireties hold an undivided, 100% interest in the land, which cannot be severed without both title holders consenting. If one party wants to sell, divest, or mortgage their interest in land held as tenants by the entireties, the spouse has to agree. �e main advantage of tenancy by the entireties is the ability to shield the land from creditors. If Debtor A is in debt to Creditor X, Creditor X cannot get a judgment levied against land owned by Debtor A so long as Debtor A’s spouse is also on the title. While there are excep-tions, namely a tax debt to the IRS, this is

the general rule. �is is not the case with joint tenants with right of survi-vorship. A judgment against Debtor A, is a lien against their share of any property owned at the time of judgment. �is can have signi�cant rami�cations for the other title holder. Same-sex couples that decide to get married have a choice to make. �ey can keep title they currently own together as joint tenants, or convert that title into a tenancy by the entireties. �is is a relatively easy—and inexpen-sive—endeavor, as it simply requires the �ling of a new deed. It may be well worth it to gain the protections a�orded by the stronger title designation.- [email protected].

Recently the National Labor Relations Board issued an opinion that will impact the relationship between healthcare organizations and sta�ng agency employees. In Sutter Tracy Community Hospital, the Board ruled that sta�ng agency employees are employed by both the sta�ng agency and the healthcare organization where they're working and that both organizations should be involved in collective bargaining with the sta�ng agency employees. �e Board also indicated that the healthcare organizations could be held liable for unfair labor practices against sta�ng agency employees. �e Board’s decision was issued on

August 28, 2015. As of the time this article was written, it was unclear whether the decision would be appealed. For now, all employers using a sta�ng agency should review their agreements with the sta�ng agency with this new ruling in mind. Although the Board’s reach extends to both unionized and nonunionized employees, if your sta�ng agency employees are represented by a Union, or if you have reason to believe that sta�ng agency employees may attempt to Unionize you need to pay particular attention as this new rule evolves. Contact Brandon Williams at [email protected] or (717) 233 4101 with questions regarding this issue or other employment related questions.

Revalidation of Medical Assistance Provider Enrollment. �e Department of Human Services is reminding all Medical Assistance provider types, includ-ing all associated service locations, that the A�ordable Care Act (ACA) requires revalidation of their enrollment every �ve years. All providers (including all associated service locations - 13 digits) who enrolled on or before March 25, 2011, must revalidate their enrollment information no later than March 24, 2016, by completing a new enrollment application. Providers who enrolled after March 25, 2011 (including Changes of Ownership after March 25, 2011), will need to revalidate their enrollment information every �ve years and should check their provider �le for their revalidation date.

Andrew R. Eisemann, Esquire [email protected]

MANAGING AND COLLECTING YOUR ACCOUNTS RECEIVABLE -

�is is the twelfth installment of our �rm’s series known as “Managing and Collecting your Accounts Receivable”. As you are already aware, the �nancial survival of most nursing facilities in Pennsylvania depend on how aggressively and e�ectively their business o�ce managers administer their accounts receivable. �is series is devoted solely to the design, management, and improvement of your accounts receivable program and collections e�orts. Also, here we share with you tips, legal updates, personal observations, and “lessons learned” to help you improve the e�ectiveness of your Accounts Receivable Management Program. I want to focus this installment on a critical player in your e�orts to watch your bottom line: the resident’s “Legal Representative”, or, as some nursing facilities in Pennsylvania refer to this person, the “Responsible Party” or “Designated Representative”.

Why do I want to devote this space to a discussion of the Legal Representative? �e weakest link in the admissions and account management process that negatively impacts a nursing facility’s bottom line is frequently the identi�cation and preparation of a resident’s Legal Representative. �e reasons for this weak link include one or more of the following:

(1) �e Admission Agreement lacks a clear de�nition, or any de�nition whatsoever, of a Legal Representative, or it lacks a description of the duties and responsibilities of the Legal Representative; (2) �e Admission Agreement properly explains that a Legal Representative will not be held personally liable for the debt, but, it fails to disclose that a Legal Representative can potentially be held �nancially liable in the amount that he or she fails to transfer from the resident’s income or assets despite having access to the resident’s resources;

(3) �e Admission Director identi�es the resident on the �rst page of the Admission Agreement as the Legal Representative, although a member of the resident’s family or a friend signs the signature line on the last page of the Admission Agreement;

(4) �e signature line of the Admission Agreement for the Legal Representative does not identify the signatory as the resident’s Legal Representative;

(5) �e Admission Director fails to identify a Legal Representative or neglects to name the person on the �rst page of the Admissions Agreement; (6) �e Admission Director neglects to have the Legal Representative sign the last page of the Admission Agreement, which is a legally enforceable contract;

(7) �e Admission Director fails to adequately explain to the Legal Representative his or her duties or responsibilities, including assistance in the MA application process. Or, worse, the Admission Director directs the Legal Representative to not make any payments or escrow the resident’s income while Medicaid is pending;

(8) �e Admission Director fails to adequately explain to the Legal Representative that the Admission Agreement is a legally enforceable and binding contract;

(9) �e Admission Director or Business O�ce fails to explain to the Legal Representative the bene�ts of arranging direct deposit of the resident’s Social Security income either as Representative Payee or through the Resident Fund Management System. �e same issue applies to the resident’s pension income; (10) �e Business O�ce fails to mail a monthly bill to the Legal Representative during the �rst several months after the facility admits the resident as a matter of policy while MA is pending; and,

(11) Finally, the Business O�ce simply allows the Legal Representative to avoid payment or not cooperate for too long. In other words, the Legal Representative is taking advantage of a disorganized Business O�ce or its passive attempts at collection.

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Your Resident’s Legal Representative

When the weak link breaks . . .. I am certain that you have experienced one or more of the following situations as a result of the weaknesses above:

(1) �e family spends the resident’s money on non-allowable expenses although the relative or resident ttruly believes that these expenditures were justi�ed;

(2) A relative intentionally or fraudulently diverts the

6

resident’s funds for personal consumption or investments;

(3) �e Legal Representative fails to fully cooperate in the Medicaid application process, including the transfer of �nancial documents or information; or,

(4) Although the CAO directs the Legal Representative to “spend down” the resident’s funds to qualify for Medicaid, he or she refuses, even if the amount is nominal. As a result of this last scenario, you’re attempting to collect against a private pay resident with insigni�cant �nancial resources.

What law allows you to contract with a resident’s family member or friend to act as the Legal Representative?

�e term, “Legal Representative,” is generally accepted under the law. �e Nursing Home Reform Act of 1987 permits the nursing facility to contract with a person who has access to the resident’s income and resources to transfer payments from the resident’s income and resources. 42 U.S.C. §1396r(c)(5)(B)(ii).

Furthermore, the Pennsylvania Administrative Code permits a resident to name a Legal Representative. 28 Pa. Code §201.24(a). �is section of the Code de�nes the Legal Representative as someone who can make decisions on behalf of the resident, but it does not obligate a Legal Representative to make payments. In addition, this section prevents a nursing facility from naming an employee as a resident’s Legal Representative, unless a court appoints the employee as the resident’s guardian. Accordingly, an Admission Agreement must be clear as to the de�nition, duties, and responsibilities of a Legal Representative to be legally enforceable. If the Admission Agreement is clear, the Legal Representative can be held legally liable for his or her failure to perform his duty to remit payment form the resident’s funds. Of course, the Legal Representative may also be held liable personally if he diverts the resident’s funds for non-allowable purposes, which requires a court order. Is a Legal Representative a Guarantor?

No. As most of you are aware, Medicaid law expressly restricts a nursing facility that is eligible for Medicaid or Medicare reimbursement from requiring a third party guarantee of payment to the facility as a condition of admission or continued stay. A Guarantor is someone who is personally liable for a debt from his or her own assets. An example of a Guarantor is the father who co-signs a car loan for his daughter. �e law does not prohibit a third person voluntarily guarantee payment to the nursing facility. I continue to see, however, the term Guarantor in admission agreements, admission fact sheets, or account invoices even though the admission agreement does not clearly obligate a third party as a guarantor.

Why do you need to take a look at the Legal Repre-sentative clauses of your Admission Agreement?

Although Pennsylvania court case law regarding the legal �nancial liability of a Legal Representative is scarce, the Alleghe-ny County Court of Common Pleas recently addressed this issue in Five Star Quality Care, Inc d/b/a Overlook Green v. Joyce and Charles Yablonski. �e opinion of this Court will have a strong persuasive e�ect on other county courts throughout Pennsylva-nia. In summary, the Court disallowed the nursing facility’s claim against a resident’s “Responsible Party” because the Admission Agreement did not “clearly and unambiguously” de�ne the term “Responsible Party” or obligate the Responsible Party to guarantee payment. In fact, the Court expressly preferred the term “Legal Representative”, rather than “Respon-sible Party”, because the usage of “Legal Representative” is more widely accepted and de�ned in state statutes. Because it is the nursing facility or its management company that drafts the Admission Agreement, the burden is on the nursing facility to ensure the requirements and obligations of a Legal Representative are “clear and unambiguous.” Otherwise, the nursing facility’s attempts to collect a debt against a Legal Representative in a court may be weakened or unsuccessful.

If you would like more information on how your Admission Agreement can be used or modi�ed to protect your facility’s bottom line, including an analysis and revision of the contract terms related to the Legal Representative, you may contact Andrew R. Eisemann at our Firm at [email protected]

Andrew Eisemann Presenting at our Semi-Annual Seminar in Pittsburgh, PA.

Bruce Baron Presenting at our Semi-Annual Seminar in Pittsburgh, PA.

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6th Annual Summer Party!

Pig Roast for Annual Summer Party

Glenn Parno Presenting at our Semi-Annual Seminar in Pittsburgh, PA

�e Drifters Performing at the 6th Annual Summer Party

Dan Natibo� Presenting at our Semi-Annual Seminar in Pittsburgh, PA.

Lou Capozzi Presenting at our Semi-Annual Seminar in Pittsburgh, PA.

Celebrating Capozzi Adler’s 18th Anniversary

Capozzi Adler Employees enjoy the Summer Party

Jul.

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RECENT AND UPCOMING EVENTS

Jul.

10Capozzi Adler, P.C. held its 6th Annual File Burning and Pool Party, with performances by “�e Drifters,” a Fireworks Show by Fireworks Extravaganza of Erie, and a special fundraiser for the United Leukodystrophy Foundation, Inc. and the Boiling Springs Band Association (South Middleton School District), at the Historic Woodburn Farm in Carlisle.

Andrew R. Eisemann, Esq. presented a seminar on legal and business issues facing Long Term Care Facilities for Saber Healthcare Group in Scranton, Pennsylvania.

Jul.

16Daniel K. Natirbo�, Esq., presented a Webinar in cooperation with LeadingAge PA on “Buying, Selling, Transferring, and Renovating Skilled Nursing Beds in Pennsylvania.”

Aug.

6Andrew R. Eisemann, Esq. presented a Webinar in cooperation with LeadingAge PA on “Taking Control of Your Resident Accounts Receivable: Prevention and Reaction to Problem Accounts.”

The QuarterlyCapozzi Adler, P.C. Attorneys at Law

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Capozzi Adler, P.C.Attorneys at LawP.O. Box 5866Harrisburg, PA 17110

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The QuarterlyCapozzi Adler, P.C. Attorneys at Law

Enclosed is Our Semi-Annual Free Seminar Flyer

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Aug.

11Glenn A. Parno, Esq. presented a Continuing Legal Education program at the Delaware County Bar Association in Media, on “Environmental Enforcement: Defending Criminal and Civil Enforcement Actions.”

Aug.

24Glenn A. Parno, Esq. presented a Continuing Legal Education program at the Dauphin County Bar Association in Harrisburg, on “Environmental Enforcement: Defending Criminal and Civil Enforcement Actions.”

Oct.

16Capozzi Adler, P.C. Semi-Annual Continuing Education Seminar – “Current Issues in 2015 for Nursing Facilities in Pennsylvania” – at the John Henry Room, Hollywood Casino, in Grantville. Admission is free along with 7 continuing education credits for NHA’s, lawyers, and CPA’s. For a brochure and registration information, email Gabriella Marchi at our Firm: [email protected].

Nov.

5Bruce G. Baron, Esq. is scheduled to present a full-day seminar as part of Penn State Greater Allegheny’s licensing program for nursing home administrators on “�e Government’s Role in Health Care Policy, Regulation and Reimbursement” at the campus in McKeesport.

Nov.

19Andrew R. Eisemann, Esq. will be partnering with Liberty Lutheran Services to present for LeadingAge PA’s Financial Seminar at Masonic Village, Elizabethtown.

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PAIDHARRISBURG, PAPERMIT NO.792

CAPOZZI ADLER, P.C. Attorneys at Law

Presents its Semi-Annual Continuing Education Seminar CURRENT LEGAL ISSUES AFFECTING PENNSYLVANIA NURSING FACILITIES

Friday, October 16, 2015 (8:30 a.m. – 5:00 p.m.) Hollywood Casino at Penn National Race Course (John Henry Room)

777 Hollywood Blvd, Grantville, PA 17028

Approved for 7 professional education credit hours for NHAs, Attorneys, and Accountants at no cost to you

8:00 a.m. – 8:30 a.m. - Registration Lobby in front of The Hall of Champions

8:30 a.m. – 8:40 a.m. Administrative Remarks Andrew R. Eisemann, Esq. Welcome & Opening Comments: Louis J. Capozzi, Jr., Esq.

8:40 – 8:50 UPDATE FROM THE LITIGATION DEPARTMENT Donald R. Reavey, Esq.

8:50 a.m. – 9:50 a.m. Brandon S. Williams, Esq. LIFE CYCLE AND COSTS OF EMPLOYEE DISCRIMINATION CLAIMS

9:50 a.m. – 10:50 a.m. Louis J. Capozzi, Jr., Esq.

NLRB & UNION ACTIVITY UPDATE, including NEW NLRB ELECTION RULES

10:50 a.m. – 11:00 a.m. – Mid-Morning Break

11:00 a.m. – 12:30 p.m. TAKING CONTROL OF YOUR PHARMACY COSTS: Same Pills; Smaller Bills Saul Greenberger, LNHA TAKING CONTROL OF YOUR RESIDENT ACCOUNTS RECEIVABLE: Andrew R. Eisemann, Esq. Maximize your Reimbursement from Private and Medicaid Residents John Gentile, Esq.

12:30 p.m. – 1:20 p.m. --- LUNCH BUFFET (provided)

1:20 p.m. – 1:50 p.m. UPDATE FROM FINANCING AND REAL ESTATE DEPARTMENT Craig I. Adler, Esq.

Nicholas J. Luciano, Esq. BUILDING A PATH TO RETIREMENT Questmont, Strategic Wealth Advisor

1:50 p.m. – 3:20 p.m. MEDICAID RATES AND SETTLEMENT ISSUES UPDATE Timothy T. Ziegler, Senior Reimbursement Analyst UPDATE ON MEDICIAD LITIGATION AND Daniel K. Natirboff, Esq. BUYING, SELLING, FINANCING, AND RENOVATING NURSING HOME BEDS

3:20 p.m. – 3:30p.m. – Mid-Afternoon Break

3:30 p.m. – 4:30p.m. Bruce G. Baron, Esq. COMPLIANCE ISSUES: PROVIDER ENROLLMENT REVALIDATION; PROPOSED NEW CONDITIONS OF PARTICIPATION IN MEDICAID/MEDICARE; NURSING HOME COMPLIANCE LITIGATION UPDATE

4:30 p.m. – 5:00 p.m. Glenn A. Parno, Esq. ATTORNEY GENERAL CONSUMER PROTECTION ACTIONS AGAINST NURSING FACILITIES

5:00 p.m. – 6:00 p.m. INFORMAL SOCIAL AND NETWORKING

REGISTRATION INFORMATION Credits: This program has been approved by the National Continuing Education Review Service (NCERS) of the National Association of Boards of Examiners for Nursing Home Administrators for 7 clock hours; has been submitted for approval by PACLE for 7 participant hours and 7 substantive credit hours of CLE for attorneys; and is approved by the Pennsylvania State Board of Accountancy (No. PX177781) for continuing education credits for CPAs. Certificates of Attendance will be provided to Seminar participants. Participants must sign in and out in order to obtain Continuing Education Credits for Program Hours actually attended. Attorneys seeking PA CLE Credits must file Certificates of Attendance and pay the required fee directly to PACLE in order to obtain CLE credits.

Cost. None.

Limited Supply of Special Hotel Rates Available at the Hampton Inn Harrisburg/Grantville/Hershey (717-469-7689). The cutoff date for the special rate is Thursday, October 1st.

Directions to the JOHN HENRY ROOM (SEMINAR ROOM): Parking Garage, Casino Entrance Closest to the Race Track: Park on any level of the Parking Garage. Take the elevator to Level F (Boxed Seats/Banquets) Make a Left off of the elevator down the ramp. You will enter the third floor of the Casino. Walk past the first Mutual Window and you will see the entrance to the elevator and stairs on your left. Take the elevator to the fourth floor and follow the hallway to the banquet rooms.

Registration Deadline: Submit the Registration information below no later than Monday, October 5, 2015 to: Gabriella Marchi, Capozzi Adler, P.C., P.O. BOX 5866, Harrisburg, PA 17110; or, by email to: [email protected]; or, by FAX to: (717) 233-4103: 1. NAME: POSITION: 2. EMPLOYER: ADDRESS: 3. TELEPHONE NUMBER: 4. EMAIL (for confirmation of your registration only): 5. NHA LICENSE NO. & STATE (if appl.): PA ATTORNEY I.D. NO. (if appl.):