Alerts and Updates

Settlement Bans Health Care Provider's Participation in Federally Funded Plans

June 25, 2008

Health Care Providers Be Aware

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.

For Further Information

For more information about this Alert, please contact Frederick R. Ball, any of the other members of the White-Collar Criminal Defense Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.