Health Care Matters

A Complimentary Newsletter From:

Law Offices Of David S. Barmak, LLC

Managing Risk for Long Term Care and Health Care Providers

Volume 12, Issue 9                               ADVERTISEMENT                                          SEPTEMBER 2011

In This Issue
Substandard Care Could Be A Basis For A False Claims Action
Documentation is The Key To Winning Or Losing A Lawsuit

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David Barmak, Esq. 


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Substandard Care Could Be A Basis For A False Claims Action

An aged woman resided in our client's nursing home. The care our client provided was excellent.  Unfortunately, the care provided by the former owner was horrendous. She developed a urinary tract infection (UTI)and was transferred to the local hospital. Sadly she died from sepsis as a result of complications in the hospital. She had survived the pain and anxiety of substandard care to make it into the comfort of quality care only to succumb to a UTI and the hospital's unhealthy methods.


The family sued our client for wrongful death.  During the trial, the attorney for the family made a strong pitch to us to settle the case or risk huge punitive damages. We acknowledged substandard care by the prior owner but told the lawyer that we did not believe the jury would punish the current owner, our client.  The lawyer dropped his bombshell: he claimed that he had a photo of a rat on the dead resident's chest. Of course we immediately notified the insurance carrier.  The carrier agreed to settle the case but insisted that our client contribute money towards a settlement. We advised our client to NOT contribute towards the settlement because this is why they paid insurance premiums. After the first week of trial the insurance company realized our client was not going to buckle under and contribute money towards the settlement. The insurance company settled the lawsuit without any contribution from our client.


WHAT IF the family then filed another lawsuit against our client under the

federal False Claims Act? A federal and/or New Jersey False Claims Act lawsuit could be much more devastating to our client that a single professional liability lawsuit covered for the most part by insurance.


During the Civil War, President Lincoln ordered millions of guns, boots and horses for the Union Army. What he got were guns that were made of wood and didn't shoot bullets, boots made from cardboard which fell apart in the rain, and dead donkeys instead of horses. Lincoln responded to this massive fraud on our federal government by introducing legislation that still stands today: the False Claims Act of 1863.  The legislation was designed to punish the defrauders and to recoup money that should never have been paid.


Fraud under the federal and New Jersey False Claims Acts can involve a nursing home intentionally misrepresenting that quality care was provided to a resident when actually substandard care was provided.  


Healthcare today is not recognized as a fundamental right guaranteed to all Americans by the US Constitution; however, it is one of the largest expenditures in the federal budget and often the largest expenditure in state budgets. For every dollar that the federal government spends to recoup money paid to healthcare providers because of fraud, it recovers over $13. Our federal government and nearly all states, including NJ, have identified healthcare fraud as a top priority - not only because it is morally correct but because it offers the best opportunity to recoup money needed to cover budget deficits.  Even the recent federal Patient Affordability and Healthcare Act is funded, in large part, by recouping fraudulent payments made to healthcare providers.


If the family filed a False Claims Act lawsuit against our client, also known as a Qui Tam action, they would file the lawsuit under seal with the US Department of Justice. This means that no one except the federal government would know about the lawsuit for three or more years. The settlement in the professional liability lawsuit could have been over for years before we heard about a Qui Tam action. The government would claim that it paid our client to take care of the resident; that the resident was not taken care of properly and it wants its money back.  Unfortunately, the damages would not be limited to just this resident who died, but would be demanded for all residents over a six year period.  If the Qui Tam were settled or decided in the government's favor, the potential repayment could include three times the money paid to the nursing home plus $11,000 per claim plus barring the nursing home from Medicare and Medicaid.


The point of this story is that the best way to minimize the risk of a qui tam lawsuit is to continue to provide perfect care, complete documentation and have a compliance program. To date there aren't any reported cases involving a Qui Tam being filed during or after a professional liability lawsuit - YET!   

Documentation Is The Key To Winning Or Losing A Lawsuit

Our firm defended a case in which an extremely ill, middle aged woman came to my client's nursing home.  She had severe circulatory problems.  She went back and forth many times to a nearby hospital. Every time she returned from the hospital, she had a stage 3 decubitus ulcer. The hospital recorded in the chart that it discharged her with a stage 2 decubitus ulcer. We are all seeing this discrepancy because of reimbursement considerations. Unfortunately, these intentional misidentifications can result in ultimate liability for our nursing homes. Our client performs one miracle after another in healing all of the decubitus ulcers. Sadly, the resident did not return from her last hospital visit because she died.  The family sued our client, the nursing home and did not sue the hospital. The family acknowledged that she developed ulcers in the hospital; however, they claimed that these ulcers never healed in the nursing home.  They were wrong but the nursing home chart did not definitively show that the ulcers had healed. The nursing home chart was not complete because of sloppy documentation.  After three and a half years of litigation, the insurance carrier decided, against our recommendation, that the case was not defensible.  The insurance carrier settled for many thousands of dollars.


The point of this story is that your staff can provide miraculous care but like the tree falling in the woods, miraculous care without complete and accurate documentation goes unheard during a lawsuit.

Mission Statement - Reduce Your Risk Now
Our firm is dedicated to helping health care providers, in particular long term care facilities and their insurers, reduce costs by minimizing the risk of adverse events.


We do this by being proactive (pre-litigation strategies). This includes training and education of employees, review of policies and procedures, implementing communication channels, getting feedback through interviews and focus groups, and continuous monitoring and auditing. Vital to employee education is documentation training and effective communication training.


If an adverse event occurs, our response is promptly reactive (pre-litigation strategies). Mandatory, non-binding mediation is utilized whenever possible. Our goal is to quickly resolve disputes before they escalate and require resolution through the judicial system. To avoid a repeat occurrence, we continue staff training and education with a focus on prevention, as well as review and revise policies and procedures for greater effectiveness.
If a lawsuit is filed, the risk that existed has been realized (litigation strategies). Defense analysis, expert witnesses, focus groups, and mock trials are all part of litigation defense. Finally, implement post-litigation risk management strategies to remedy the situation.


A comprehensive Compliance Program (also known as a Risk Management Program) focuses on early intervention through training, communication, and policy review. Monitoring and auditing are key elements to reduce medical liability exposure and improve patient safety.


Our firm offers numerous specialty risk management programs including a pharmacy risk management program which involves the review of skilled nursing facility pharmacy contracts and monthly pharmacy bills, assistance in renegotiating pharmacy contracts with an effort to obtain favorable pricing, evaluate Medicaid pending claims for credit after residents become Medicaid approved and/or evaluate pricing for Medicaid pass thru drugs.


David S. Barmak, Esq. received his JD from Cornell University and BA from Duke University. He is licensed to practice and serves clients in the States of New Jersey, New York, Connecticut and Pennsylvania. Before making your choice of attorney, you should give this matter careful thought. The selection of an attorney is an important decision.

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Copyright, 2011.  Law Offices Of David S. Barmak, LLC.  All rights reserved.
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