Foundation Health Services: The Evacuation That Brought a Chain Under Scrutiny

In the Foundation Health Services fraud case, the company agreed to pay $750,000 over allegations that it billed Medicare and Medicaid for materially substandard or worthless nursing-home care. The investigation began when a failed air-conditioning system forced an entire facility to evacuate. It expanded into allegations about medication errors, unanswered call lights, insufficient nursing staff and living conditions. The alleged bargain left residents without the care they needed and taxpayers paying for it.

The Department of Justice announced the settlement on June 13, 2014. Foundation Health Services and its president and chief executive officer agreed to the payment to the United States and Maryland.

At the time, Foundation was a Louisiana nonprofit that owned and managed nine nursing facilities in Pennsylvania, Mississippi, Virginia and Maryland. The Department of Justice named Rock Glen Nursing and Rehabilitation Center and Harborside, formerly Ravenwood Nursing Center, among its Baltimore facilities. The case reached both the care provided in the homes and the decisions about staffing, equipment and premises that supported it.

Care Failures Across the Nursing Home

The government alleged failures across everyday resident care between 2006 and 2010. Its account covered fall prevention, pressure-ulcer and infection-control protocols, medication administration, mental-health treatment and prompt responses to call lights. It also alleged failures to help some residents with bathing, feeding, monitoring and supervision.

The government’s allegations reached the resources behind those routines, too: enough nursing staff with the right skills, adequate equipment, a habitable living environment and needed capital spending.

The United States and Maryland alleged that some residents suffered falls, fractures, head injuries, malnutrition, dehydration, pressure sores and infections as a result of the care failures. The alleged shortfall reached residents’ bodies as well as the government’s bill.

A California Research Bureau report, Fraud and Abuse in the Health Care Market of California, describes the broader healthcare problem as underutilization:

That focus on a pattern helps explain the breadth of the Foundation allegations. The government described failures in care, staffing and the physical conditions needed to house residents safely. For an employee, those problems may appear in different records even when they concern the same resident or shift.

Ravenwood’s Evacuation Opened the Investigation

All residents of Ravenwood Healthcare, Inc., a Baltimore facility operated by Foundation, needed evacuation after its air conditioning broke down over a July holiday weekend in 2010. Temperatures reached more than 100 degrees. DOJ identified that event as the trigger for the government’s False Claims Act investigation.

The investigation uncovered other quality-of-care concerns at Ravenwood, Rock Glen and a Foundation-owned facility in Pennsylvania. Foundation subsequently closed Ravenwood.

Independent Monitoring Across the Chain

Foundation agreed to a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. It required an independent monitor and allowed the agency to oversee care at all skilled nursing facilities associated with Foundation. The oversight extended beyond Ravenwood and the other homes identified in the investigation.

Foundation was late hiring that monitor. In an enforcement entry dated September 18, 2014, the inspector general recorded a $25,000 demand over late retention of the independent quality monitor. Foundation retained the monitor, the demand was withdrawn, and the agreement was extended by two months.

A similar combination of care allegations and outside oversight appeared in CF Watsonville East and CF Watsonville West’s settlement. That resolution required $3.8 million and addressed allegations of overmedication, inadequate monitoring and grossly substandard care. An integrity agreement with independent monitoring accompanied the payment.

What Evidence Is Needed to Prove Fraud?

Evidence in a nursing-home care case connects what residents received to what the facility recorded, billed and knew about the shortfall. Clinical notes, staffing and payroll records, contracts and claims can supply different parts of that account. Our whistleblower experts work with you to connect those records to the people who controlled the care and the payment claims.

The clinical record follows the resident. Nursing notes, observations, orders, Minimum Data Set assessments and hospital records can show the resident’s condition and the care documented around it. In a case involving alleged falls, pressure sores or medication errors, the detail matters: which resident, what need, what care and when. The billing record connects that account to the services represented to Medicare or Medicaid.

The Minimum Data Set draws on observations of the resident and information from direct-care staff across shifts. A registered nurse coordinates or conducts the assessment, and each contributor certifies the accuracy of their portion. Our experts work with the people who know those records to connect that account to the payment claim.

The staffing record follows the shift. Schedules show the planned coverage, while payroll, time records and staffing-agency invoices help explain the people and hours behind it. Where the concern is missed assistance or unanswered call lights, that comparison connects the resident’s experience with the resources available to provide care.

A nurse may understand the care chart. A payroll employee may understand the shift coverage. A billing or management employee may understand the claims and contracts. We build the case around how that knowledge fits together.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. If you know where the care delivered and the care billed diverged, our whistleblower experts work with you to build a nursing home whistleblower case around that knowledge.

You Know the Care Behind the Claim

If you saw missed care, staffing gaps or claims that told a different story inside a nursing home, talk with our whistleblower experts about what you saw. We build your strongest nursing home whistleblower case with you, bring in nursing-home fraud whistleblower lawyers who understand care delivery and government billing, and stay beside you through the pursuit of a recovery.