One of the largest operators of skilled nursing facilities (SNFs) in the U.S. has recently agreed to pay a multi-million-dollar settlement to end a 6-year False Claims Act (FCA) case. The settlement, announced by the U.S. Department of Justice (DOJ) in May 2021, will be paid by SavaSeniorCare, LLC (Sava) to resolve allegations that the company illegally billed Medicare and Medicaid for unreasonable, unnecessary, and “grossly substandard” nursing services.
Notably, Sava’s $11.2 million settlement comes on the heels of other recent FCA recoveries by the U.S. Department of Justice. That includes a May 2021 $22 million FCA settlement with the University of Miami, and a $10.25 million FCA settlement with three Ohio treatment facilities announced in March 2021.
Background: Qui Tams Consolidated into FCA Case
The False Claims Act case against Sava began in August 2011, with a qui tam claim filed by a woman in Tennessee. Subsequently, two more whistleblowers came forward to file claims against Sava in Tennessee, followed by a fourth qui tam action filed against Sava in Pennsylvania.
In 2015, the DOJ filed various motions to consolidate the multiple qui tam cases against Sava. Collectively, the cases include:
- United States ex rel. Hayward v. SavaSeniorCare, LLC, et al. Case No. 3:11-cv-0821 (M.D. Tenn.)
- United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, Case No. 3:15-cv-0404 (M.D. Tenn.)
- United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., Case No. 3:15-cv-1102 (M.D. Tenn.)
- United States, et al. ex rel. Thornton, et al. v. SavaSeniorCare, Inc., et al., Civil Action No. 16-CV-0840 (E.D. Pa.)
The Allegations Against Sava
According to the federal complaint, Sava had allegedly been submitting false claims to Medicare and Medicaid since 2008. In some instances, Sava allegedly sought payment for rehabilitation therapy services in a scheme designed to inflate the bills it was submitting to government health care programs. Authorities contended the scheme led to company-wide practices, policies, and goals to improperly maximizing Medicare billings. Specifically, the government alleged that Sava:
- Pressured its facilities with unachievable financial goals
- Provided unskilled, unnecessary, and/or unreasonable services to patients and filed fraudulent Medicare and Medicaid claims for those services
- Disregarded patients’ actual medical needs when providing services
- Delayed discharges from SNFs, despite patients meeting the medical standards for discharge
While the above practices allegedly occurred from 2008 through September 2012, Sava was also accused of billing Medicare and Medicaid for nursing services that were “grossly and materially substandard and/or worthless” for more than a decade. The services under scrutiny were rendered between 2008 and 2018 during which time Sava allegedly filed claims with Medicare and Medicaid for services that “failed to provide care to residents that meets federal standards of care and federal statutory and regulatory requirements.” The allegations focused on Sava’s billing for services that involved serious failures, including (but not limited to) failing to:
- Sufficiently staff their facilities
- Follow protocols for the prevention of pressure ulcers and falls
- Properly administer medications in a manner that would prevent medication errors
Sava has denied all allegations made in this False Claims Act case and continues to operate more than 20 special nursing facilities across the U.S.
Settlement Agreement
Fully executed in May 2021, the settlement agreement does not require Sava to admit liability, nor does it constitute a concession from authorities that “its claims are not well-founded.” It does set forth an $11.2 million settlement, along with additional amounts based on various financial contingencies, and Sava is barred from taking action to avoid payment such as filing for bankruptcy.
Beyond the financial aspects of the settlement, the company has agreed to comply with several other terms, including (but not limited to):
- An independent annual review of its Medicare claims and patient stays for the next five years
- Retaining an “Independent Monitor” to evaluate the quality of services and care provided to patients
If Sava defaults on any aspect of this agreement, the DOJ could rescind the deal, resulting in potential interest accrual and exclusion from Medicare and Medicaid.
Commenting on the resolution to this case, Acting U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania stated:
Nursing home residents should not be at the mercy of nursing home operators that put their own economic gain ahead of the needs of the residents, and we will continue to aggressively pursue those operators who bill Medicare and Medicaid for substandard care… This settlement holds Sava accountable, and the resulting Corporate Integrity Agreement should ensure that Sava provides seniors with quality care and treats its residents with dignity and respect.
Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee, who was involved with the investigation and prosecution of the case, noted that authorities “are grateful to the courageous whistleblowers who reported this egregious conduct.”
Since 1986, FCA cases have recovered more than $64 billion. Elaborating on authorities’ focus on these cases, Acting Assistant Attorney General Jeffery Bossert Clark has stated, “the continued success of the department’s False Claims Act enforcement efforts are a testament to the dedication of the civil servants who pursue these important cases, as well as to the fortitude of whistleblowers who report fraud.”
