Alleged Deficiencies in COVID-19 Safety Protocols Lead to DOJ Enforcement Action

Jones Day

On May 14, 2021, the U.S. Attorney's Office for the Northern District of Iowa ("USAO") announced a civil settlement involving a nursing home's allegedly deficient procedures and practices relating to COVID-19 during the early days of the pandemic.

In what appears to be the first civil resolution of its kind, the USAO entered into a settlement with the defendant, Care Initiatives, for $214,200 for alleged deficiencies in COVID-19 safety protocols. According to the settlement, the amount represents the federal share of Medicaid funds paid to one of Care Initiatives' 40 long-term care facilities during a 10-week period when "at least some [] residents were suffering from and/or testing positive for COVID-19." In the settlement agreement, the United States asserted that during this period, the facility's "practices surrounding COVID-19," including "procedures and criteria for screening symptomatic employees," were allegedly deficient. According to the government, these alleged deficiencies, which occurred April 14, 2020, through July 1, 2020, "entitle the United States to restitution" for the federal share of money paid through Medicaid in connection with beneficiary stays for that period.

While the settlement amount is small, the Care Initiatives matter serves as a concrete reminder that the government is scrutinizing the adequacy of COVID-19 safety protocols in the context of federal reimbursement—even with respect to the early days of the pandemic. Notably, however, the settlement does not include allegations, or a release, relating to False Claims Act liability and instead limits itself to "restitution" paid pursuant to common-law theories of payment by mistake and unjust enrichment.

According to the press release issued in this case, the Department of Health and Human Services, Office of the Inspector General, indicates that it will continue to investigate "substandard safety practices."

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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