Michigan’s Attorney General is using a state law against Medicaid fraud to sue a nursing home operator over staffing levels.
The complaint accuses southeast Michigan-based Pioneer Health Care Management Inc. and nine facilities it manages of not meeting legally required patient-to-caregiver ratios. It covers a period from July 2020 through the end of 2025.
The lawsuit says during that span, facilities failed to reach staffing levels 96% of the time. Michigan Attorney General Dana Nessel said the company still turned in Medicaid reimbursement forms that claimed otherwise.
“When they say, ‘Yes, we have adequate staffing. Yes, we can manage the needs of an additional resident, or two, or three, or five, or how many,’ that is the underlying fraud,” Nessel told reporters during a press conference in Lansing Thursday.
Nessel said using the Michigan Medicaid False Claim Act in this way is a new attempt to hold healthcare facility operators accountable. She said her office doesn’t have the same authority that the Michigan Department of Licensing and Regulatory Affairs (LARA) does to shut facilities down.
LARA has already cited the facilities for concerns like giving psychotropic medications without permission, not properly monitoring side effects, and not addressing behavioral concerns.
David Tanay, the Health Care Fraud division chief with the Attorney General's Office, said the state has held individual employees responsible in the past when incidents occurred. But using the Medicaid law in this way could help spur real change.
“This case represents an attempt that is novel for Michigan to go it alone on this theory to try and hold ownership and management accountable for staffing conditions in the facilities,” he said.
Alison Hirschel is with the Michigan Elder Justice Initiative. She acknowledged not having enough personnel is a real issue facing some nursing homes. But she said there are also other ways facilities spend their money, like “related party” payments that make oversight hard.
“When nursing homes assert that they don’t receive enough money in reimbursement to do better, we don’t know if that’s because they really don’t receive enough money in total public funds or that they simply skim so much off in profits that there isn’t enough left over to care for residents,” Hirschel said.
The state is seeking monetary damages tied to the money the company made through its alleged wrongful conduct, plus a $5,000 to $10,000 fine for each reimbursement claim filed when understaffed during the investigation.
Attempts to reach the defendants in the case Thursday afternoon were unsuccessful.
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