Pittsburgh, Pennsylvania — Two skilled nursing operators in the Pittsburgh suburbs thought they had a clever argument: the government never actually lost money, so why should they pay $15 million in restitution? A federal appeals court just demolished that logic.
The U.S. Court of Appeals for the Third Circuit on Tuesday upheld the convictions of Brighton Rehabilitation and Wellness Center and Mount Lebanon Rehabilitation and Wellness Center, finding that both facilities systematically falsified staffing records to keep Medicare and Medicaid dollars flowing despite chronic understaffing.
A federal jury had convicted the operators in December 2023. Trial evidence showed that employees and managers listed workers who weren’t providing direct patient care — or weren’t even present at the facilities — to make it appear the nursing homes met required staffing levels. The goal was straightforward: avoid sanctions and keep the federal funding coming.
Prosecutors argued the companies prioritized profits over patient care. The court heard testimony from family members of former residents who described how staffing shortages harmed care, including an incident in which a resident was seriously injured in an assault while no staff were available to intervene.
The U.S. District Court for the Western District of Pennsylvania had previously ordered Comprehensive Healthcare Management Services, which operates Brighton, to pay $12.6 million in restitution and serve five years of probation. Mount Lebanon Operations, which runs the other facility, was ordered to pay $2.7 million and serve one year of probation.
On appeal, the operators argued that restitution wasn’t warranted because the Centers for Medicare & Medicaid Services suffered no economic harm. The Third Circuit disagreed. The court pointed out that repeated staffing shortages could have triggered thirty-day admissions bans, and the loss amounts reflected federal payments the operators would not have received if such bans had been imposed.
“The evidence showed that repeated staffing shortages could have led to thirty-day admissions bans following each survey in which false records were submitted,” the court filing states.
The $15 million restitution will be paid to the U.S. Department of Health and Human Services.
The case comes as regulators across the country are stepping up enforcement of nursing home staffing standards. Massachusetts recently secured a $2.75 million settlement from Bear Mountain Healthcare for chronic understaffing at 11 facilities, and federal officials have warned that new enforcement tools are on the way.
Discover more from Skilled Care Journal
Subscribe to get the latest posts sent to your email.
