On February 11, 2013, a jury in federal district court in Illinois found a nursing home operator (Company) liable under the False Claims Act and the Illinois Whistleblower Reward and Protection Act for fraudulent billing and certifications. U.S. v. Momence Meadows Nursing Center Inc., No. 04-cv-2289 (C.D. Ill.). The jury also found that the Company retaliated against the employees who reported the alleged misconduct. The verdict form can be accessed here.
Two former employees (Plaintiffs) commenced the case in 2004. They claimed that the Company provided inadequate care for its elderly and disabled patients, and that it filed multiple false or fraudulent claims to state and federal agencies. The complaint alleged that the inadequate care contributed to the death of three patients and an outbreak of bedsores at the facility. Plaintiffs further alleged that the Company retaliated against them in 2003 because they complained of the inadequate care and the billing practices.
After a nine-day trial, the jury found for Plaintiffs on all counts. The jury assessed the Company with more than $19M in penalties for filing false claims and another $9M in penalties for providing "worthless" services. And the jury awarded more than $400K to the two Plaintiffs.
This sizeable award may encourage similar types of whistleblower claims in the nursing care industry. It also requires employers to appreciate the risk of claims under a range of state whistleblower laws, in addition to the False Claims Act. Plus, it underscores the need for employers to take concerted steps to identify whistleblower retaliation risks and conduct rigorous and routine audits with respect to billing practices. Check out our list of the Top Ten Ways To Minimize Whistleblower Risks.
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