Despite the recent trend of successes in decertifying wage and hour class actions in healthcare and other sectors, the number of lawsuits seeking to certify class actions in the healthcare industry continues to grow. As a result, we also continue to see settlement of these costly and time consuming lawsuits. In one recent case, U.S. Nursing Corp. has agreed to pay $1.77 million to quickly settle claims that it failed to pay the replacement registered nurses that it provided to hospitals during labor strikes for the all-too common claims of wages owed for travel time and automatic meal period deductions. The nurses also claimed that they should have been paid daily, rather than weekly. The settlement was filed for preliminary approval on May 2, 2013, and a hearing to preliminarily approve the settlement is scheduled for June 6, 2013. (Bolton v. U.S. Nursing Corp., N.D. Cal., No. 3:12-cv-04466).
EEOC Files First Genetic Discrimination Class Action Against Nursing and Rehabilitation Center
On May 16, 2013, the U.S. Equal Employment Opportunity Commission filed its first class action lawsuit under the Genetic Information Nondiscrimination Act (GINA) against a nursing and rehabilitation center. The EEOC filed this class action just 11 days after it filed—and then immediately settled—its very first lawsuit alleging genetic bias. The EEOC’s filing of these two lawsuits in such close succession signals to employers its commitment to pursuing genetic discrimination claims.
Pennsylvania Supreme Court Upholds More Stringent Standard for Grant of Immunity Under Federal Health Care Quality Improvement Act
By Joon Hwang
The Pennsylvania Supreme Court’s recent decision not to reconsider a lower court ruling that a hospital was not entitled to immunity under the federal Health Care Quality Improvement Act of 1986 (“HCQIA”) could have important implications for entities seeking protection under this Act.
HCQIA was enacted, in part, to encourage candid and critical peer review of physicians without fear of creating a damaging record for potential malpractice lawsuits or a floodgate of employment, tort or contractual actions by the physician whose conduct is being reviewed. To achieve this, the HCQIA provides healthcare employers with immunity from adverse actions taken as a result of professional peer reviews. A professional review action subject to immunity must, however, meet certain standards. Notably, the healthcare employer must establish that the peer review action was taken:
- In the reasonable belief that the action was in furtherance of quality health care;
- After a reasonable effort to obtain the facts of the matter;
- After adequate notice and a hearing that was fair to the physician under the circumstances; and
- In the reasonable belief that the action was warranted by the facts known after such reasonable efforts to obtain facts and after the hearing specified above.
Courts uniformly recognize that addressing disruptive physician behavior is “in furtherance of quality health care.”
The Push for Nurse-to-Patient Ratio Laws Expands
Updated: May 10, 2013
Earlier this year we reported on the aggressive efforts of nursing unions to push nurse-to-patient staffing ratios through collective bargaining and by exerting political pressure on state legislatures. To date, California is the only state to pass legislation mandating that a certain number of nurses be staffed for every patient. But as we reported, the National Nurses United (NNU) and affiliated state unions were pushing similar legislative proposals in the District of Columbia, Michigan, New Jersey and Minnesota.
Since our last report, similar bills have been proposed in Florida, Texas, New York, and Iowa, as well as one reintroduced in the U.S. Senate that would apply nationwide.
The common purpose of these laws is to ensure a fixed number of nurses per patient, though there is some variation in the ratios and how they would be established.
New Rule Ups the Ante for Medicare Fraud Whistleblowers
By Rob Wolff
Blowing the whistle on Medicare fraud may become dramatically more lucrative. On April 29, 2013, the Department of Health and Human Services (HHS) announced its intention to elevate the maximum payout for whistleblowers by a multiple of nearly one million. Specifically, the HHS’s Centers for Medicare and Medicaid Services (CMS) announced it would raise the ceiling for whistleblower payouts to nearly $10 million from the current cap of $1,000. By revising the Incentive Reward Program provisions in § 420.405 of the Code of Federal Regulations, the proposal would entitle any Medicare fraud whistleblower whose tip leads to a recovery to 15 percent of the overpayments recovered, with a cap of $9.9 million. The goal, according to CMS, is to “increase the incentive for individuals to report information on individuals and entities that have or are engaged in sanctionable conduct; improve our ability to detect new fraud schemes; and help us ensure that fraudulent entities and individuals do not enroll in or maintain their enrollment in the Medicare program.”
The proposed rule contains additional provisions designed to decrease Medicare fraud, including:
- expanding the instances in which a felony conviction can serve as a basis for disbarment of a provider or supplier’s enrollment;
- denying enrollment if the enrolling provider, supplier, or owner had an ownership relationship with a previously enrolled provider or supplier that had a Medicare debt;
- revocation of Medicare billing privileges upon a determination that the provider or supplier has a pattern or practice of submitting claims for services that fail to meet Medicare requirements; and
- limiting the ability of ambulance suppliers to “backbill” for services performed prior to enrollment.
Implications of the VA’s Proposed Rule Regarding Provider Agreements for Extended Care Services and Recommendations for Interested Providers
By Elizabeth A. Lalik and Rebecca Signer Roche
As previously discussed, the U.S. Department of Veterans Affairs (the “VA”) issued a proposed rule in February providing long-awaited guidance regarding an exemption to the Service Contract Act (“SCA”) for certain providers of extended care programs entering into agreements with the VA under the Veterans Health Care, Capital Asset and Business Improvement Act. The SCA imposes prevailing wage rate and fringe benefit standards, as well as various reporting requirements, on certain contractors and subcontractors.
We recently interviewed the Director of the Purchased Long-Term Care Group at the VA regarding implications of the proposed rule and steps providers can take to begin preparing for the changes. Highlights of our interview appear below:
- What are the implications of the new rule? Providers will be exempt from the SCA’s reporting and wage payment requirements, effectively removing the ability of the Department of Labor to audit them for SCA compliance. Providers therefore have discretion to determine their own wages. The removal of these reporting requirements will likely result in increased veteran care by small providers of extended care services. Such providers were previously unable or unwilling to admit VA patients, concluding that reimbursement from VA for caring for one or two veterans was not worth the cost of compiling and reporting the data required by general federal contract law. Continue Reading
Massachusetts Health Policy Commission Issues Proposed Regulations Regarding Ban on Mandatory Overtime For Nurses
By Carie Torrence and Joseph Lazazzero
As previously reported, effective November 5, 2012, Massachusetts law prohibits hospitals from requiring nurses to work mandatory overtime except in “emergency situations” where “the safety of a patient requires its use and when there is no reasonable alternative.” The new law, which was buried in the lengthy healthcare cost containment legislation enacted in August 2012, created a new Health Policy Commission (“Commission”) to issue guidelines defining what constitutes “emergency situations.” The Commission recently published its proposed guidelines. A public hearing for the guidelines is scheduled for April 26, 2013.
The proposed guidelines define “emergency situation” as “an unforeseen event that could not be prudently planned for or anticipated by a hospital and affects patient safety in the hospital and where there is a (a) government declaration of emergency;¹ (b) catastrophic event;² or (c) patient care emergency.”
U.S. Supreme Court Tackles Rule 68 Offers of Judgment Made to a Lead Plaintiff in an FLSA Collective Action
By Martha Keon and Bill Simmons
Last week, a divided U.S. Supreme Court ruled in Genesis HealthCare Corporation v. Symczyk, that if the Fair Labor Standards Act (FLSA) claim of a lead plaintiff in an FLSA collective action becomes moot before anyone else opts in, the mere presence of collective action allegations in the complaint is not sufficient to make the FLSA claim justiciable, and the FLSA claim should be dismissed for lack of subject matter jurisdiction.
Background
Laura Symczyk was employed as a registered nurse by Genesis Healthcare Corp. in Philadelphia for eight months during 2007. Two years after she left, Symczyk filed a collective action against Genesis in federal district court, claiming Genesis had violated the FLSA by automatically deducting 30 minutes of time per shift for meal breaks, during which she claimed compensable work had been performed. Symczyk asserted her claims on behalf of herself and all employees similarly situated, seeking back pay, liquidated damages and attorney’s fees. When it answered the complaint, Genesis served Symczyk with an offer of judgment under Federal Rule of Civil Procedure 68, offering her $7,500 for alleged unpaid wages, plus attorney’s fees, costs, and expenses as determined by the court. Under Rule 68, a plaintiff who rejects an offer of judgment and then secures less at trial is liable for post-offer costs (such as expert witness fees, mileage fees to subpoenaed witnesses, court filing fees, and costs for transcripts and photocopying). Symczyk did not accept Genesis’ offer of judgment, and it expired. Continue reading this entry at Littler’s Wage and Hour Counsel.
Hospital Required to Provide Union with Information Relating to Strike Replacements
A National Labor Relations Board Administrative Law Judge (“ALJ”) recently held that Petaluma Valley Hospital violated the National Labor Relations Act by refusing to provide the California Nurses Association/National Nurses United (“CNA/NNU”) with information regarding strike replacements. This decision is of particular importance to unionized hospitals that are faced with increasingly common nursing strikes.
The hospital and NNU were involved in contract negotiations and – in what is becoming a familiar NNU bargaining tactic – the NNU notified the hospital that nurses would engage in a one-day strike. In response, the hospital engaged a staffing agency to supply replacement nurses. Because the staffing agency required a five-day minimum for replacement nurses, the hospital informed NNU that nurses could not return to work until after the five-day period.
Circuit Court Affirms Healthcare Facilities’ Single Employer Status Under NLRA
By John Doran
The Third Circuit recently upheld the National Labor Relations Board’s finding that a separately organized nursing home facility is properly considered a single employer with its parent company. The case, Grane Health Care v. NLRB, involved a nursing home that was purchased by Grane Healthcare Co. Grane subsequently established a new entity called Cambria Care Center to operate the facility. The facility’s employees had been represented by two unions. Grane refused to recognize those unions after it purchased the nursing home. Grane also extended employment offers to most of the facility’s employees, but did not offer employment to four out of the five officers of one union and an employee represented by the other union who was active in an earlier strike.
The unions filed unfair labor practice charges over Grane’s decision not to recognize the unions as the exclusive bargaining representatives and not to hire the five individuals. Perhaps unsurprisingly, the Board found in favor of the unions. Notably, the Board found that Grane and Cambria were single employers and were therefore jointly and severally liable for the violations. Under the “single employer” doctrine, the Board may treat two different corporate entities as one employer for liability purposes under the National Labor Relations Act.