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 13, Issue 1                             ADVERTISEMENT                                                      JANUARY 2012

In This Issue
New Jersey's Conscientious Employee Protection Act Establishes a Statutory Exception to the General Rule that Employers May Terminate At-Will Employees With or Without Cause
News Briefs

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New Jersey's Conscientious Employee Protection Act Establishes a Statutory Exception to the General Rule that Employers May Terminate At-Will Employees With or Without Cause

New Jersey's Conscientious Employee Protection Act (CEPA) precludes an employer from retaliating against an employee who:


(1)   Discloses or threatens to disclose a practice of the employer that the employee reasonably believes to be in violation of a law, regulation, or public policy;

(2) Provides information to a public body conducting an investigation into any violation of law, rule, or regulation; or

(3) Refuses to participate in any activity, policy, or practice (a) which the employee believes to be in violation of a law, rule or regulation; (b) is fraudulent or criminal; or (c) is incompatible with a clear mandate of public policy.


There are a few additional details that are significant and of which you should be aware:


First, retaliation is a broad term; you need not fire an employee to have retaliated against him. Retaliation also includes instances in which an employee is skipped for promotion, harassed, or otherwise mistreated because he blew the whistle.


Second, the term "employee" is very broad in the CEPA context. CEPA defines an "employee" as "any individual who performs services for and under the control and direction of an employee for wages or other remuneration." The NJ courts have construed this definition broadly, extending CEPA protection to independent contractors. The court has used a twelve factor test in determining whether the complainant was an employee or independent contractor but three considerations were found to be most crucial in the determination: (1) employer control; (2) the worker's economic dependence on the work relationship; and (3) the degree to which there has been a functional integration of the employer's business with that of the person doing the work at issue.


Third, the protection against retaliatory action provided by CEPA does not apply where an employee makes disclosure to a public body unless the employee first brings the activity, policy, or practice in violation of a law, rule, or regulation to the attention of a supervisor or employer, by written notice, and, second, affords the employer a reasonable opportunity to correct the activity, policy, or practice.

  • Note, however, that the written notice requirement is waved where the employee is reasonably certain that the supervisor already knows about the violation or if the employee reasonable fears physical harm and the situation is an emergency, meaning that the employer's conduct was illegal or violated public policy, rather than errors in judgment by the employer.

Now, having some background, consider the following:


Fearing skin breakdown, a well respected and highly regarded hospital nurse complained, for 4 years, that the hospital staff improperly used diapers on bed bound and wheelchair residents who were incontinent. After his complaints when unanswered by his superiors, he complained to the New Jersey Department of Health. Subsequently, the nurse was fired for "substandard nursing practices as it pertains to charting the dispensing of narcotics", which the nurse admits to. However, the nurse contents that his firing was causally related to his whistleblowing activity as opposed to his poor charting; he further claimed that his disclosure was a protected activity under CEPA.


The nurse must establish the following four elements in order to make a successful CEPA claim:

  1. He reasonably believed that his employer's conduct was violating a law, rule, regulation or a clear mandate of public policy;
  2. He performed a whistleblowing activity;

  3. An adverse employment action was taken against him; and

  4. A causal connection exists between the whistleblowing activity and the adverse employment action.

Has the nurse made a successful CEPA case? Yes. There is a rational basis for a jury to conclude that the nursing home's reason for firing the nurse was merely a pretext, rather than a lawful, legitimate and non-retaliatory reason. The nurse need only show that his protected whistleblowing activity was a determinative or substantial motivating factor in the hospital's decision to terminate his employment.


Where a CEPA violation is found, the employee's potential relief is as follows:

  • Injunction

  • Reinstatement of the same or equivalent position
  • Reinstatement of full fringe benefits and seniority rights

  • Compensation for all lost wages

  • Benefits and other remuneration

  • Payment of the employee's reasonable costs and attorney's fees

What are the penalties for non-compliance?


Failure to comply with CEPA could result in a civil fine up to $10,000 for the first violation and up to $20,000 for any subsequent violations as well as unlimited punitive damages to patients, employees, and further employees caused by the activities, policies, or practices disclosed by the employee.


Bottom Line:


Follow your compliance program, which establishes procedures for:

  • Corporate responsibility standards and a code of conduct to employees at all levels

  • Establishes procedures for receiving and responding to complaints in a timely manner
  • Encourages employees to come forward and lodge (even anonymous) complaints

  • Suggests appropriate remedial action if retaliation occurs

If your facility does not have a comprehensive compliance program and you would like further information on how to establish one please contact one of our attorneys by calling the office at 609 454 5351. 

News Briefs

A study released by the American Health Care Association (AHCA) on December 15, 2011 predicts the shortfall in Medicaid funding for seniors' long term care needs will reach $6.3 billion in 2011. Additional analysis in the report shows the projected national average shortfall equates to a $19.55 per patient per day loss - up from the $16.54 per patient per day loss in 2009. For the average 100 bed nursing facility where approximately 63 percent of residents rely on Medicaid, this shortfall translates into an additional cost of $1,230 per day more than is reimbursed by Medicaid to care for those residents.


States with the greatest underfunding of nursing facility care in 2011 include New York, Wisconsin and New Jersey. Nursing facilities in Wisconsin and New Jersey have a projected per patient per day loss of $41.13 and $34.04, respectively, while New York tops the chart with a loss of $42.48 per patient per day. New York also has the dubious distinction of being the state with the greatest overall Medicaid underfunding, which the shortfalls report projects to be $1.2 billion in 2011.




Thirty-two leading health care organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative made possible by the Affordable Care Act, HHS Secretary Kathleen Sebelius announced in a press release dated December 19, 2011 from the Centers of Medicare & Medicaid Services (CMS). The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.  Under this initiative, operated by the CMS Innovation Center, Medicare will reward groups of health care providers that have formed ACOs based on how well they are able to both improve the health of their Medicare patients and lower their health care costs.


The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These payment models will allow organizations that are successful in achieving better care and lower cost growth to move away from a payment system based on volume under the fee-for-service model, towards one where the ACO is paid based on the value of care it provides.

Law Offices Of David S. Barmak, LLC
Our firm is dedicated to helping health care providers, in particular skilled nursing facilities, manage risk through a comprehensive compliance program that focuses on early intervention through on-site training, communication, policy & procedure review, monitoring and consultation. The program includes on site training in the areas of, but not limited to, fraud & abuse, HIPAA privacy and data security, employment, emergency preparedness, workplace violence, clinical documentation, sexual harassmentand social networking.


The firm's compliance team includes experienced compliance attorneys, clinical nurses, physical therapy and pharmacy consultants who are available to assist clients with pre and post Department of Health (DOH) survey procedures, respond to DOH questions, prepare for re-inspections, minimize risks for deficiencies, offer support to Directors of Nursing and correct care plans, incident reports and therapy notes, review Medicare billing, audit and review PPS/Medicare/Medicaid insurance documentation.


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This newsletter has been prepared by the Law Offices Of David S. Barmak, LLC for informational purposes only and is not intended to provide legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
For more information, please contact us:
Telephone (609) 454-5351
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Copyright, 2012.  Law Offices Of David S. Barmak, LLC.  All rights reserved.
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