DOJ Sues Pennsylvania Nursing Home Chain Under the False Claims Act Alleging Grossly Substandard Care

July 5, 2022

In June 2022, the U.S. Department of Justice (DOJ) filed a civil suit under the federal False Claims Act against a chain of nursing homes in Pennsylvania and Ohio. The Complaint alleges that American Health Foundation (AHF) and three of its nursing homes provided grossly substandard care for which Medicare and Medicaid should not have paid. According to the complaint, AHF leadership was aware for years that the conditions at its facilities fell short of the standards required by the Nursing Home Reform Act (NHRA), but failed to remedy these violations and focused solely on profitability. In fact, the DOJ’s complaint alleges that AHF amassed over $16 million which they invested in stocks, and not in necessary staff and supplies to improve the quality of care to their patients.

The care and services provided at AHF’s nursing homes were “grossly substandard or non-existent,” in the DOJ’s words. Patients’ healthcare and dietary needs were routinely ignored or not met. Staff did not observe proper infection control, and at one facility, soiled diapers were found on the floor or walls and not in waste or biohazard bins. Residents were housed in living areas riddled with pests and mold, and nursing home staff failed to provide residents with adequate activities or necessary prescription medication. At one facility in Cheltenham, PA, residents were given unnecessary psychotropic medication, likely to chemically sedate them.

The DOJ complaint also highlights the knowledge and control that AHF leadership, including its subsidiary management company, wielded over each facility’s day-to-day operations. The homes routinely had to obtain approval from AHF leadership for expenditures on staffing, supplies, or facility improvement. Often, these requests were denied.

The claims raised in the DOJ’s complaint are allegations only and have not been proven.

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The National Nursing Home Initiative (NNHI)

The AHF suit appears to be part of the National Nursing Home Initiative (NNHI), a program announced by the DOJ in March 2020 to investigate nursing homes that “consistently fail to provide adequate nursing staff to care for their residents, fail to adhere to basic protocols of hygiene and infection control, fail to provide their residents with enough food to eat so that they become emaciated and weak, withhold pain medication, or use physical or chemical restraints to restrain or otherwise sedate their residents.” In the announcement, the DOJ indicated it was investigating over 30 nursing homes in nine states.

The AHF case is among the first False Claims Act suits against nursing homes for substandard care filed by the DOJ since the announcement of the NNHI, and more similar cases can be expected. Although the AHF case was brought directly by the DOJ and not through a whistleblower, the False Claims Act allows an insider to bring claims of Medicare and Medicaid fraud on behalf of the Government, and receive a whistleblower award of up to 30% of the Government’s recovery.

If you know of a nursing home providing grossly substandard care similar to that described in the AHF complaint, you should consult with a whistleblower law firm to learn your rights and discuss if you are eligible to receive a whistleblower award.