[co-author: Stephanie Kozol*, Isaac Sherman]
Massachusetts Attorney General (AG) Andrea Joy Campbell announced a $4 million settlement with Next Step Healthcare, LLC (Next Step), a Massachusetts-based long-term care management company, in a deal that the AG described as the largest-ever nursing home settlement in Massachusetts. According to the AG’s announcement, Next Step operates 16 nursing homes in Massachusetts.
According to the AG, the settlement resulted from a multiyear investigation by the AG’s Medicaid Fraud Division into alleged violations of the state False Claims Act, flowing from changes to Massachusetts nursing home regulations that went into effect in April 2021. The regulations codify minimum staffing requirements, and specifically require nursing homes to provide 3.58 hours of care per person per day. Of the 3.58 hours, 0.508 must be provided by a registered nurse.
According to AG Campbell’s statement, the investigation was prompted by complaints and referrals received from the Department of Public Health. The AG asserted in the settlement that Next Step was “systematically noncompliant” in meeting their regulatory staffing requirements. While the AG’s press release did not contain a public copy of the settlement, a copy is available through Mealey’s (linked above). According to the settlement, Next Step agreed to pay $750,000 to the Commonwealth of Massachusetts, and also agreed to injunctive relief totaling approximately $3.25 million dollars to bring their staffing into compliance under an Independent Compliance Monitoring Program.
According to the terms of the settlement, the Independent Compliance Monitoring Program requires Next Step to hire an independent compliance monitor approved by the Medicaid Fraud Division. The monitor is to first conduct a baseline assessment of staffing compliance at Next Step facilities and develop a final compliance plan that will be shared with both Next Step and the Medicare Fraud Division. Next Step will also be subjected to twice-annual audits by the Monitor for a minimum of two years. The audits will review Next Step’s staffing compliance and quality of care. To achieve this objective, Next Step must provide the monitor with access to all documents and records, and make their employees, patients, and contractors available for interview to the monitor to complete the audit.
According to the AG’s press release, the settlement is only the AG’s latest effort to “advance elder justice.” The AG recently announced the creation of the Elder Justice Unit and co-led a letter urging the federal government to increase minimum staffing standards nationwide.
Why It Matters
The Next Step settlement, which AG Campbell described as the largest ever nursing home settlement with her office, demonstrates the increased regulatory interest at the state AG in the long-term care facilities and the health and safety of the residents of such facilities. In this instance, the AG’s use of potential False Claims Act liability to enforce staffing requirements at such facilities is notable as the AGs are beginning to use state False Claims Acts as a tool to ensure compliance with state requirements in health care and other industries.
*Senior Government Relations Manager
