A federal prosecutor in Tennessee announced on March 30, 2026, that a healthcare company has agreed to pay more than $2 million to resolve allegations under the False Claims Act related to substandard nursing home care. The settlement resolves claims that the company improperly billed Medicare and the state’s Medicaid program for services provided at one of its facilities between 2019 and 2024.
According to the allegations, the facility—operated by a subsidiary of a larger senior healthcare provider headquartered in Tennessee—failed to meet required standards of care in various ways. The government alleged that residents did not receive proper wound care, appropriate infection control, and protection from falls. Additional allegations included failure to prevent significant weight loss and loss of mobility among residents, as well as the overprescription of antipsychotic medications.
In 2023, state regulators temporarily suspended new admissions to the facility after determining that conditions were likely harmful to residents’ health and safety. The facility has since changed ownership following the sale of the parent company’s nursing home operations in late 2024.
Under the terms of the settlement, the company will pay approximately $2.09 million plus interest, with the funds divided between the federal government and the state of Tennessee.
Compliance Perspective
Issue
Skilled nursing facilities are required to provide care and services that meet professionally recognized standards of practice and comply with federal and state regulations. When care falls below these standards, it may be deemed substandard or even worthless, creating not only risks to resident health and safety but also potential exposure under the False Claims Act. Submitting claims for services that do not meet required standards can result in significant financial penalties, regulatory enforcement actions, and reputational harm. Maintaining strong clinical and compliance oversight is essential to mitigate these risks.
Discussion Points
- Facilities should maintain comprehensive, up-to-date policies and procedures that support the delivery of care in accordance with regulatory requirements and accepted clinical standards. This includes policies addressing areas such as wound care, infection control, fall prevention, medication management, and changes in resident condition. Policies should be reviewed regularly and updated as needed to reflect regulatory changes and identified risk areas. Some facilities choose to engage an external consultant to perform targeted reviews or mock surveys to help identify gaps and align policies with current expectations and best practices.
- Provide education to staff which ensures they consistently follow facility policies and meet regulatory requirements. Training should address clinical competencies, proper documentation, and the delivery of care that meets each resident’s assessed needs. Staff should also understand how care deficiencies can create compliance and billing risks. Med‑Net Academy offers the course Fraud Module 14 – Quality Care and Improvement, which summarizes the elements necessary for providing quality care, identifies elements of quality-of-life compliance related to residents’ rights, and discusses the company’s quality improvement program.
- Regular audits should be conducted to evaluate whether care is being delivered in accordance with established policies and regulatory standards. These audits may include clinical record reviews, observations of care practices, and evaluation of documentation supporting billed services. Audit findings should be used to drive corrective actions, monitor improvement, and reduce compliance risk. Facilities may benefit from periodic independent or consultant-led audits, including mock surveys or focused reviews, to provide an objective assessment of operations and identify potential deficiencies before they result in citations or enforcement actions. Contact Med-Net Healthcare Consulting or info@mednetconcepts.com for more information.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*