Former nursing home giant Kindred Healthcare must face claims that it improperly billed Medicare and Medicaid at the height of its skilled nursing success, even though the whistleblower in the case may have based his suit on publicly available allegations in another case.
Judge Karen Spencer Marston for the US District Court for the Eastern District of Pennsylvania denied the provider’s motion to dismiss the case earlier this week, rejecting the company’s argument that the case has no validity because it violated the False Claims Act requirement that whistleblowers have special insider knowledge to bring a case under the law.
Instead, Kindred argued, plaintiff Timothy Sirls’ claims pre-dating March 2010 should be barred because he based them on a 2011 Kentucky case “with substantially similar” claims.
The court acknowledged that a provision in False Claims Act public establishes that a whistleblower-triggered suit “shall be dismissed ‘if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed,’ unless ‘the person bringing the action is an original source of the information.’”
But Marston ruled Tuesday that Sirls’ 2016 case differs enough to move forward.
Sirls spent four months as a director of nursing services at a Kindred’s Manor Healthcare Center in Kentucky at a time when Kindred operated 174 nursing facilities across the country.
He claimed that in facilities in 10 states, Kindred purposefully recruited patients with high needs levels “so that it could reap higher Medicare and Medicaid reimbursements” but also “purposefully understaffed the facilities so that it could see a higher profit from those reimbursements.”
He argued that because of understaffing, it was “humanly and mathematically impossible” for the nursing facilities to deliver services they claimed were being provided.
Did Kindred ‘dupe’ officials?
Claims in both cases were related to alleged inaccurate completion of the MDS forms that determined the level of care that patients needed under Medicare’s previous RUGS payment system.
But Sirls said that Kindred was trying to paint the similar allegations in the two cases “with too broad a stroke.” Although he acknowledged both cases involved falsified MDS forms, he said the previous case was based on the argument that the government “was duped into paying for services that were not needed.”
In his current suit, he said, the government was “being duped into paying for services that were not provided.”
Marston agreed with Sirls and allowed the remaining claims to advance after two years of fact-finding. She also ruled that Sirls’ team can request evidence from Kindred dating back to Jan. 1, 2008. The judge also noted, however, that Kindred could argue the statute of limitations on early allegations had expired in a future motion for summary judgment.
The federal government and several state governments declined to pursue the case when Sils brought it to them. The same claims by Sirls in four other states have already been dismissed, according to this week’s ruling.
Once a major player in the nursing home business, Kindred left the sector in 2017 and now specializes in long-term care hospitals and other types of post-acute care.In 2021, Kindred merged with LifePoint Health to become ScionHealth. A communications executive with the new company did not immediately respond to a request for comment on the case from McKnight’s Long-Term Care News Thursday.
