Loyola University Chicago School of Law, JD 2017
In 2011, Vanguard Healthcare, LLC (“Vanguard”) settled a whistleblower suit for Medicare and Medicaid fraud and entered into a Corporate Integrity Agreement (CIA). Now the federal government is suing Vanguard for submitting fraudulent claims for services that were “either non-existent or grossly substandard.”
Corporate Integrity Agreement
A former employee of Vanguard filed suit in 2003 for double-billing and other fraudulent practices, after repeatedly informing officials that they were violating the law. The government intervened under provisions of the False Claims Act. As part of the settlement, Vanguard entered into a CIA, in which it agreed to develop and implement a compliance program to ensure future compliance with regulations. The CIA contained provisions regarding: a compliance officer and committee, written standards, policies and procedures, training and education, compliance with the Anti-kickback statute and Stark law, review procedures, a disclosure program, reports of noncompliance and investigations, “ineligible” persons, and repayment of overpayments. Vanguard agreed to assume compliance obligations under the CIA until October 7, 2016. A material breach of the CIA could result in severe monetary penalties or even exclusion.
Vanguard Failed to Provide Residents with Basic Services
Six of the fourteen Vanguard facilities were negligent in providing care, leaving residents to suffer from “pressure ulcers, falls, dehydration, and malnutrition, among other harms.” One of the skilled nursing facilities (SNF), Imperial Gardens Healthcare and Rehabilitation was terminated in 2013 for noncompliance with the conditions of participation. The State Agency conducted a complaint investigation and completed a lenghty report which revealed dozens of cases of significant medications errors. In some cases, medical staff failed to provide medications despite clears orders from a physician, and some patients died as a result. Surveyors cited several cases of patients suffering multiple falls, including a case that resulted in a spinal fracture. There were also many cases of residents suffering from serious pressure sores. Crestview Health and Rehabilitation Center, another Vanguard SNF, was fined nearly $240,000 in Civil Money Penalties for noncompliance with the conditions of participation. Surveyors cited deficiencies that placed residents in “immediate jeopardy.” The report indicated staff were verbally abusive and failed to report important information to treating physicians. Vanguard SNFs have had several deficiencies, including but not limited to, chronic staffing shortages, failing to provide standard infection control, providing unnecessary and excessive psychotropic medications, and unnecessary use of physical restraints.
2016 False Claims Act Suit
On September 7, 2016, the Department of Justice announced that the United States filed a False Claims Act case against Vanguard Healthcare LLC, Vanguard Healthcare Services LLC, Boulevard Terrace LLC, Vanguard of Crestview LLC, Glen Oaks LLC, Imperial Gardens Health and Rehabilitation LLC, Vanguard of Memphis LLC, Vanguard of Manchester LLC, and Vanguard’s Director of Operations, Mark Miller. In addition to the lack of adequate care, the complaint alleges that the defendants submitted Pre-Admission forms with forged physician and nurse signatures. The lawsuit further alleged that Mr. Miller knew that the Vanguard SNFs were negligent in providing care but failed to correct the deficiencies. The DOJ believes this case marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) inititiate. The False Claims Act has proven to be a powerful tool for the HEAT. Since the initiative was announced in 2009, the Justice Department has recovered more than $18.5 billion in cases involving fraud against federal healthcare programs.