Whistle-Blowers at Nursing Homes Get $2 M, While Those at VA Incur Career Difficulties

By William J. Beerman, Sr.

Three whistle-blowers who reported false claims allegations about nursing homes where they provided care are to get $2 million of a $10 million settlement of the case, the U.S. Department of Justice announced July 18.

Meanwhile, the Government Accountability Office (GAO) reported in July that whistle-blowers in the Department of Veterans Affairs (VA) were much more likely than their peers to receive disciplinary action within a year of reporting misconduct, and they were much more likely to drop from VA employment rolls.

In the nursing home case, two consulting companies and nine affiliated skilled nursing facilities (SNF) agreed to pay $10 million to resolve False Claims Act allegations related to allegedly medically unnecessary rehabilitation therapy services.

Under the agreement, Southern SNF Management, Inc., Rehab Services in Motion, doing business as Dynamic Rehab, and nine affiliated SNFs in Florida and Alabama agreed to resolve allegations they violated the False Claims Act by submitting or causing the submission of false claims to Medicare for medically unnecessary rehabilitation services. They agreed to pay to the United States a total of $10 million.

The federal government alleged that they submitted false claims during 2009-2013 based on inflated Resource Utilization Group (RUG) levels.

The allegations resolved by this settlement arose from a whistle-blower lawsuit filed under the False Claims Act by La-Wanda Davis, Tramecier Donald, and Megan Dinkins, former employees of one of the skilled nursing facilities.  Under the False Claims Act, private citizens can sue on behalf of the government for false claims and share in any recovery. The whistleblowers will receive $2 million of the recovered funds.

The case is captioned United States ex rel. Davis, et al. v. Southern SNF Management, Inc., et al., Case No.13-000384-WSM (S.D. Ala.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

Regarding the VA, GAO reported in Report GAO-18-137 that individuals who filed a disclosure of misconduct with the Office of Special Counsel (OSC) received disciplinary action at a much higher rate than the peer average for the rest of the VA in fiscal years 2010–2014. Additionally, GAO’s interviews with six VA whistle-blowers who claim to have been retaliated against provided anecdotal evidence that retaliation may be occurring. “These whistle-blowers alleged that managers in their chain of command took several untraceable actions to retaliate against the whistle-blowers, such as being denied access to computer equipment necessary to complete assignments,” GAO said.

For 129 nonanonymous whistle-blowers, GAO found that only approximately 2 percent received an adverse action in the fiscal year prior to their disclosure, while 10 percent had received an adverse action in the fiscal year of their disclosure, and 8 percent received an adverse action in the year subsequent to this disclosure. “While the fact that nonanonymous whistle-blowers faced higher rates of adverse action subsequent to their disclosure than the VA population as a whole is consistent with a pattern of retaliation for nonanonymous whistle-blowers, it is only an indication that retaliation could be occurring,” GAO said.

GAO’s analysis also showed that among employees who could be matched to the end-of-year roster, attrition rates were higher for those individuals who filed a nonanonymous disclosure with the OSC. On average, only approximately 9 percent of all VA employees on the end-of-year roster in one fiscal year were not on the subsequent year’s roster. In contrast, 66 percent of the 129 nonanonymous whistle-blowers did not appear in the subsequent year’s roster. Attrition rates were higher among employees who had filed a disclosure than among their peers who had not filed disclosures, for all fiscal years in GAO’s review.