Vanguard Healthcare: Care Charted for a Resident Who Was Elsewhere

The Vanguard Healthcare worthless care fraud case ended in a settlement allowing more than $18 million in bankruptcy claims over allegations that nursing homes billed for nonexistent or grossly substandard care and used forged TennCare certifications. Inside the homes, the government’s complaint described care recorded for an absent resident, staffing cuts despite repeated warnings, and physician signatures copied onto forms before anyone added the patient’s information.

The Justice Department announced the resolution on February 27, 2019. The care allegations covered periods from 2010 through 2015 at five Tennessee homes: Boulevard Terrace, Crestview, Glen Oaks, Imperial Gardens and Poplar Point. A separate set of allegations concerned hundreds of preadmission forms that the same five homes submitted to TennCare, Tennessee’s Medicaid program, with forged nurse or physician signatures from 2012 through 2014.

The United States and Tennessee brought the case. The settlement involved Vanguard Healthcare, its facility businesses, its majority owner and chief executive, and its former director of operations. The complaint alleged that corporate management controlled admissions, budgets and finances, including the funds available for resident care.

What the Government Alleged About Care

The government alleged a pattern of missed medications, deficient infection control, inadequate wound care and pressure-ulcer prevention, unnecessary restraints, and failures to meet residents’ nutrition and hygiene needs. Its complaint also described inadequate pain management, excessive psychotropic medication, and shortages of basic equipment and supplies. It connected many of those failures to insufficient staffing.

A Profitability Plan and Fewer Nurses

At Imperial Gardens, the complaint alleged that corporate decisions reduced the staff available to deliver care. The corporate president complained that nursing hours per resident day were not helping the profitability plan and recommended cutting that ratio. The operations director later ordered the removal of agency staff, whom the home did not replace with regular employees.

According to the complaint, a nurse sent from another Vanguard facility found one nurse assigned to 80 patients and heard that management knew about the shortage. Staff raised staffing problems and medication errors at morning meetings. An internal audit identified wound-care failures, incomplete care plans, infection-control and charting problems, and unaddressed test results. The complaint said a copy went to the operations director at corporate headquarters.

That sequence puts a decision behind the empty places on a shift.

Medication Ordered, Care Recorded

The complaint alleged that a resident admitted to Imperial after a stroke went 22 days without prescribed Coumadin after a doctor ordered it restarted. For another resident, wound care depended on whether an extra staff member was available. An avoidable pressure sore developed that required surgery.

The same complaint described a pharmacy arrangement that allegedly left residents waiting for medication. Vanguard used its own pharmacy business, ElderScript, in Tupelo, Mississippi. Facility managers warned about late deliveries, but the complaint alleged that the company failed to switch to a closer pharmacy or otherwise fix the problem. A purchasing decision at corporate level reached the resident as a missed dose.

The charting allegations were equally concrete. For the resident admitted after a stroke, the government alleged:

A hospital stay gives that entry something independent to check against. The complaint also alleged prolonged blanks and false entries in medication records, treatment records and daily-living sheets across the homes. The evidence reaches both the care residents missed and the paperwork saying they received it.

The California Research Bureau’s 1997 report Fraud and Abuse in the Health Care Market of California described systematic substandard treatment as a form of underutilization. Staffing decisions, supply arrangements and daily care can belong to the same pattern. Here, the government alleged that residents went without essential services while the facilities continued billing Medicare and Medicaid.

Signatures Before the Assessments

The forged TennCare certifications supplied a separate route to payment in the government’s case. The complaint described pre-admission evaluations used to determine medical eligibility for nursing-facility care. One part certified the accuracy of the assessment. A physician separately certified the level of care and medical necessity.

The complaint also described preadmission screening and resident reviews concerning mental illness or intellectual disability, specialized services and appropriate placement. Those forms carried their own certifications. The signature was supposed to stand behind a clinical determination about a particular person.

At Imperial Gardens, the government alleged that an administrator directed a medical records clerk to apply a nurse’s electronic signature to assessments. The nurse had neither performed the assessments nor authorized use of her name. After corporate management heard about the practice, an official said someone would visit and conduct an audit. The complaint alleged that neither happened and the practice continued.

The settlement resolved forged-signature claims at the same five homes as the care allegations: Boulevard, Crestview, Glen Oaks, Imperial and Poplar Point. The claims were that Vanguard, its majority owner and chief executive, and its former operations director caused those homes to submit preadmission forms with forged signatures to TennCare to be reimbursed by Medicaid from 2012 through 2014. Manchester Health Care Center, another Vanguard home, is not among the homes the settlement names, but the complaint draws on what investigators found there. The government alleged that staff used forms carrying photocopied physician signatures, entered the patient assessments afterward and post-dated the certifications. It said the physicians never certified the forms’ accuracy before submission.

At Manchester, Tennessee Bureau of Investigation agents found a binder containing 30 pre-printed pre-admission evaluation forms with a physician signature already present, according to the complaint. Staff described using those evaluations and screening forms:

The signature had become part of the blank stationery. In the government’s account, staff learned the copied-signature process as the way to complete the work.

The complaint then made the payment connection explicit: TennCare would have denied the affected residents’ approval for its CHOICES program because of the forged certifications, and would not have paid the resulting long-term-care claims. The allegation joined the form, the false signature, the approval and the money paid.

Where the Care Record Meets the Bill

We work with nursing-home insiders to connect the care residents received with the certifications, corporate decisions and claims behind the payment.

The nursing-home payment structure explains why those records belong together. The complaint described payment for a bundle of nursing-home services on a daily basis. Medicare’s skilled-nursing payment bundles room, board, nursing, therapy, drugs, laboratory services and supplies, with specified exceptions. Medicare pays the facility, and the facility’s contract determines payment to an outside supplier. A pharmacy or staffing arrangement can therefore sit inside the story of what the home billed for resident care.

Clinical staff also create the information used beyond the bedside. Nurses coordinate assessments, contributors certify their portions, physicians supply orders and certifications, and aides document continuing care. We connect those records with the claim and with the decisions about staffing, supplies and admissions that affected the resident.

In Vanguard’s complaint, the warning trail included staff meetings, an internal audit sent to corporate management, pharmacy complaints and a report of forged signatures. Our work with you is to establish that connection around the records you know.

The Settlement and Care Agreement

In the announced settlement, the reorganized businesses agreed to pay more than $5.1 million, and the government received $13.5 million in allowed claims against two liquidating businesses. The majority owner and chief executive and the former operations director agreed to pay a combined $250,000 as part of the settlement. The Justice Department anticipated a total recovery exceeding $6 million.

The resolution also included a five-year quality-of-care corporate integrity agreement covering the reorganized defendants and the majority owner and chief executive.

Vanguard’s Earlier Enteral-Billing Case

Vanguard’s earlier enteral-billing case ended in a separate $2 million settlement announced on November 8, 2011. It concerned allegations that enteral services and supplies were billed to both Medicare and Medicaid. The Justice Department also alleged billing for supplies obtained free and for patients who were ineligible for the skilled-nursing benefit.

That earlier case turns on the billing and eligibility records for enteral feeding. The later care case turns on the services delivered and the certifications. Each settlement answers a different question about what the government paid for.

A Whistleblower’s Share of the Recovery

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. If your view inside a nursing home connects missing care or false certifications to public payments, speak to our whistleblower experts about what you saw.

You Know What Happened on the Shift

If you saw care entered for absent residents, copied certifications or staffing warnings that went unanswered, tell our whistleblower experts what happened inside the home. We build the case with you around the care, the claims and the corporate decisions, and bring in nursing home fraud whistleblower lawyers who understand those connections. We stay beside you as your knowledge becomes a case for recovering public money.