Brighton Nursing Home Administrator Charged with Health Care Fraud

Two nurse administrators in the Western District of Pennsylvania were acquitted after a five week trial in Pittsburgh. The nurses and others including the CEO of a large nursing home corporation were charged with health care fraud related to allegations of understaffing. The United States Attorney for the Western District of Pennsylvania, lead by Bob Cessar spearheaded an investigation which began as an inquiry into a high number of COVID deaths in the nursing homes.

A Novel Theory of Health Care Fraud

Unfortunately, for the Government, that investigation did not bear fruit given that the large number of deaths was attributable to conflicting guidance provided to the nursing home. Having spent considerable resources investigating the matter, the FBI and other law enforcement pivoted their efforts in an attempt to allege that the nursing homes were short staffed and the short staffing violated state requirements. Additionally, the Government alleged that this short staffing amounted to health care fraud because the federal government requires adequate staffing for federal funding.

This is the most recent in a long line of efforts to repackage contractual breaches as health care fraud allegations. Not so long ago, Justice Thomas in Universal Health Ex Rel Escobar (follow link for a full breakdown) made clear that non-compliance with regulations does not amount to a false claim much less health care fraud. Most recently in Ciminelli v. United States, the Supreme Court again made clear that deprivation of the intangible right to control a party’s actions in conformance with a contract does not amount to healthcare fraud.

To read about Cimninelli’s impact on health care fraud click here.

The Acquittal of Individual Defendants

Undeterred, the Government brought this theory to trial against Comprehensive Healthcare Management Services, Sam Halper, and the two nurses Susan Gilbert and Eva Hamilton along with others. Fortunately, the defendants did not have to wait to test the Government’s theory in the appellate court. Thanks to the skilled litigation by the defense team lead by Jonathan Meltz of the Chapman Law Group, Kirk Ogrosky of Goodwin Proctor, Paul Pelletier and others, the defense was able to secure the full acquittal of all individual defendants.

Note: Ronald Chapman II participated in the investigation and defense of Defendant Eva Hamilton who was acquitted. However, due to a trial conflict, Paul Pellitier represented Ms. Hamilton at trial.