A six-year court battle waged by the state attorney general’s office over what it claimed was misleading marketing by a Pennsylvania skilled nursing facility chain is ending with a $6 million settlement.
The case was originally launched in 2015. It was founded on the PA state attorney general’s claim that the Pennsylvania nursing home, which has not had a presence in Pennsylvania since 2017, was sending out marketing material promising services it didn’t actually provide. The firm used to have several facilities in central Pennsylvania.
A Commonwealth Court panel dismissed the Attorney General’s suit in 2016, ruling that the advertising claims in dispute were mere “puffery” exaggerations that weren’t legally actionable. The Attorney General appealed, and the State Supreme Court reinstated the suit in 2018.
The Supreme Court found the Attorney General’s office has made viable claims against the Pennsylvania SNF under the State’s Unfair Trade Practices and Consumer Protection Laws. The core of the dispute claims that the Pennsylvania SNF, whose parent company is Arkansas-based, exaggerated the level of care provided to its customer and deliberately understaffed its facilities to maximize profits.
Pennsylvania’s Attorney General stated that $4 million from the nursing home chain’s payment will be used to finance Pennsylvania’s nursing home inspection system. He further stated, “This agreement provides crucial funding for inspections to ensure that nursing homes are sage and provide essential care to Pennsylvania seniors.”
The consent decree also gives the Attorney General’s office strict oversight and access to company information should the Pennsylvania SNF seek to resume doing business in Pennsylvania. The consent decree containing the agreement is awaiting approval by Commonwealth Court.
Compliance Perspective
Issue
It is necessary for the marketing department to be fully aware of the services that a nursing home offers. All advertisements for a facility must be accurate and depict truthfully the services that can be provided. Leaders of the nursing home should review advertisements and other marketing materials to ensure that they are accurate and that services can be provided at the facilities as stated. False advertising can be seen as a violation of the Unfair Trade Practices and Consumer Protection Laws.
Discussion Points
- Review your policies and procedures for truthful marketing. Update as needed.
- Train marketing personnel on services that are offered at each facility. Document that the trainings occurred and file each signed document in the employee’s education file.
- Audit your facility’s advertisements and other marketing materials to ensure that they are accurate and depict the actual services that your facility offers.
