On June 10, 2008, United States Attorney’s Office for the Eastern District of Pennsylvania entered into a groundbreaking settlement agreement based upon substandard quality of care. Under the settlement, the health care facilities, the management company, and the individual owner, Rosalind S. Lavin agreed never again to own or operate a health care facility and never again to participate in any federally funded health care program. The settlement reflects enforcement authorities’ expanded efforts to investigate and regulate quality of care and a willingness to explore various approaches to enforce quality of care standards, including permanently excluding violators from participation in federal or state health care payment programs and barring them from working in the health care field.
The settlement arose from an investigation of adult residential care facilities, known as personal care homes, in Pennsylvania. Personal care homes house and treat adult residents, many of whom suffer from physical or mental health problems. The government alleged the defendant facilities consistently failed to meet federal standards, and residents received inadequate and dangerous care. Alleged quality of care violations included: Structurally unsafe residences; inadequate security; insufficient nutrition; unsanitary conditions; irregular and limited personal care; inadequate oversight of medications; inadequate and unclean clothing, linens, and bedding; and inadequate activities of daily living. The government also alleged that Lavin diverted residents’ Social Security and Supplemental Security Income benefits for her personal use and failed to provide a proper accounting of those benefits.
“When the [quality of care] criteria set by the government are not met or are ignored, it is incumbent upon us to defend those who cannot defend themselves over shortfalls,” stated U.S. Attorney Patrick L. Meehan in a press release.
Among the settlement terms were the following key provisions:
First-of-Its-Kind Settlement Agreement
According to the U.S. Department of Justice, the Lavin settlement is the first of its kind for these adult residential facilities. Other enforcement authorities may elect to pursue this approach when faced with quality of care failures. Unlike cases of isolated fraud or false certification, the government sometimes takes a tougher approach to facilities with demonstrated patterns of chronic, substandard care. Rather than incur the risk and expense of heightened scrutiny and extensive monitoring, enforcement authorities may prefer to remove permanently the offending owners and operators from health care programs by mandating a permanent lifetime exclusion coupled with a prohibition against ever working in the health care industry.
Federal and state authorities continue to explore new and creative ways to improve quality of care. As the Lavin settlement revealed, all health care facilities should carefully consider the impact of these new and far-reaching settlement demands in quality of care actions.
Janice A. Anderson
Nathaniel M. Lacktman
Lawrence W. Vernaglia
Cheryl L. Wagonhurst
Judith A. Waltz