• Settlement Bans Health Care Provider's Participation in Federally Funded Plans
  • July 8, 2008 | Author: Frederick R. Ball
  • Law Firm: Duane Morris LLP - Chicago Office
  • On June 10, 2008, several Pennsylvania health care facilities, their management company and the individual owner, Rosalind Lavin, agreed to never again participate in federally-funded health care programs. The settlement resulted from a U.S. Attorney's Office for the Eastern District of Pennsylvania investigation of claims of substandard living conditions provided to adult residents of the Pennsylvania health care facilities.

    The health care facilities served physically and/or mentally disabled adult residents who required assistance and supervision in day-to-day activities. Following an investigation, the U.S. Attorney's office alleged that the health care facilities' management company did not fulfill the quality of care requirements set forth by the Social Security Act and implementing guidelines. Further, the U.S. Attorney's office alleged that these funds were being directed toward the personal use of Rosalind Lavin.

    The entities and owners agreed to pay $700,000 to the United States. The entities and owners agreed to cease operating Ivy Ridge facility as a personal care home and to assist in the relocation of its residents. Finally, they agreed to never again act as the representative payee for collecting government benefits, or to participate, either directly or indirectly, in the ownership, operation, consultation for, or management of a health care facility, either government-funded or private pay. Rosalind Lavin agreed to be permanently disqualified from Medicare, Medicaid and all federal health care programs. While the parties did not admit any liability or wrongdoing, the entities and owners have agreed to fulfill these provisions.

    This unprecedented settlement indicates a shift toward significantly increased penalties against health care facility operators who fail to comply with federal law.