Skilled Nursing Operator Takes Legal Action Against Staffing Platform for Alleged Overbilling

A little over a week ago, an SNF operator dropped a lawsuit in U.S. District Court in the District of Utah against a staffing platform that works somewhat, like a staffing agency. The platform Nursa acts as a software clearinghouse connecting nursing staff (RNs. LPNs, CNAs, etc.) to facilities with open shifts – “Nursa exists to put a nurse at the bedside of every patient in need, connecting qualified nurses seeking flexible work with healthcare facilities in need of help (from Nursa)”.

The suit was filed by Oxford Valley Health, a provider with three SNFs in Arizona and Nevada. Oxford, like many SNFs nationwide, could not employ directly, enough staff to routinely fill all shifts at its facilities. They turned to Nursa, entered into an agreement, to connect with “gig” workers (nursing staff willing to pick-up shifts on short notice). Nursa claims to pay each placed staff member at the end of the shift they worked. Rates of pay are predicated by location, provider type, certifications required, what the provider is willing to pay for premium shifts, etc. Like any other per-diem placement in healthcare today, the rates for Nursa staff are higher than rates for direct employees of a provider.

Oxford alleges that Nursa over-billed for shifts that were not filled or not completely worked, etc. Nursa requires providers to verify its staffing roster reports (from Nursa, as a de facto invoice) within 48 hours of receipt. Oxford claims that the reports are lengthy, full of errors, and impractical to review and seek correction within the 48-hour review period (after which, the report submitted is deemed accurate). At issue are fees for services (contested) of $4.2 million and an additional $600K in late fees. Oxford states that it realizes that a portion of the outstanding $4.2 million is proper (due for shifts worked). The filing/suit text on behalf of Oxford is available here: Oxford v Nursa

Per the suit and Oxford officials: “As alleged in the lawsuit, we, like so many others, feel taken advantage of by the likes of Nursa, who threatened to, and then did, cut off our access to their service once we raised our concern about substantial overbilling,” he added.

Oxford alleges that Nursa breached its contract by:

  • Charging for healthcare services that were not rendered.
  • Overcharging for cancellations and urgent booking well above a reasonable market rate.
  • Refusing to reimburse for healthcare services that Nursa knew, or should have known, were not rendered.
  • Failing to investigate whether it charged for healthcare services that were not rendered, despite receiving written notice.

Oxford alleges that 33% of (approximately) 600 shifts it was billed for had no record of a worker ever showing up.

“A substantial portion of the job shifts did not have any clock in/out records, or any other form of documentation to substantiate that the clinician performed the work during the invoiced shifts,” per Oxford. Oxford further claims that it can produce video records from its facilities to verify workers were not at the facility and/or did not fill full shifts.

The interesting part of this case, to me, is the potential (Oxford request) for this suit to morph to class action litigation. Nursa has a 1,300-client base.  Per Oxford legal counsel, several facilities have joined the suit and others are exploring the option of joining.

This is the first case of this type that I have seen. Other staffing agency litigation is focused primarily on issues of 1099 employee status/independent contractors and proper classifications – employed vs. contractor. Most of these cases involve wage issues and the Department of Labor and its January Final Rule on worker classification. The issues are around back pay, overtime, and potential penalties.  Interestingly, no staffing agency or clearinghouses like Nursa or Clipboard (similar to Nursa) are party to the suits.

One example comes from Kansas involving SNF operator Medicalodges. This case will likely morph to a class action suit as the provider has facilities in Missouri and Oklahoma.  The Kansas case was brought by two CNAs against Medicalodges fo failure to fully pay the CNAs for hours worked, including overtime, because they were misclassified as independent contractors. In this case, Medicalodges used ShiftKey (similar to Nursa) to source 1099 workers though ShiftKey is not yet, a named party to the suit. 

These cases are interesting and will expand as litigation tries to sort through the incredibly vague and complex Department of Labor Rule on worker classification. The press release from the January Final Rule is available here: 

I will be taking a break to celebrate the final days of Lent and Easter so no new posts or updates until next week. Happy Easter blessings to all!

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