Multimillion Dollar Settlement Reached in DOJ Case Against SNF Organization For Disenrolling Residents from Medicare Advantage Plans

Reimbursement; Medicare; Legal

The U.S. Department of Justice (DOJ) secured an agreement with a nursing facility company that has resulted in a $7.85 million settlement. The DOJ case notes examples of facility staff disenrolling residents from Medicare Advantage plans back to Original Medicare without the resident’s consent. As part of the settlement agreement, the nursing facility organization was required to admit to the specifics of the violations.  

Implications for Nursing Facility Providers
On two separate occasions, the Centers for Medicare & Medicaid Services (CMS) has issued guidance and reminders to nursing facility providers that interfering with resident choice of health care coverage through disenrollment of residents from Medicare Advantage plans is a violation of resident rights and Federal Law.

The initial guidance reminder was released in 2015 in response to various beneficiary and state accusations that nursing facilities were disenrolling residents from Medicare Advantage plans participating in the Financial Alignment Demonstration. The agency reissued guidance in 2021 outlining what policies and procedures providers should have in place when engaging in conversations with residents around changes to health care coverage.
AHCA/NCAL urges nursing facilities to do the following:
  • ​Develop internal MA Plan policies and procedures which incorporate the guidelines outlined in the 2021 memo; and 
  • Educate staff on acceptable and unacceptable practices related to discussions and changes around resident health care coverage to avoid violations of these regulations.
Please contact Jill Sumner with questions, suggestions, or concerns.