By Greg Freeman
EXECUTIVE SUMMARY
Inadvertently hiring people with false credentials puts a healthcare employer at risk. Civil and regulatory consequences can occur.
- Federal officials charged 25 people involved with an alleged fake diploma scheme.
- Employers could be hit with fraud charges.
- Carefully verify all submitted credentials before hiring.
Employees with falsified credentials can pose a serious threat to patient safety and expose healthcare employers to great liability.
Recently, 25 people were charged in connection with a fake nursing diploma and credentialing scheme that took place between 2016 and 2021. Some of the people who paid for fake diplomas and transcripts passed the national nursing board exam and were employed by healthcare institutions.
The Department of Justice (DOJ) said the now-closed Florida schools issued more than 7,600 fake nursing diplomas. The schools involved were Siena College, Palm Beach School of Nursing, and Sacred Heart International Institute. The DOJ said they “engaged in a scheme to sell fraudulent nursing degree diplomas and transcripts obtained from accredited Florida-based nursing schools.”1
Many of those who received fake documents were not from Florida and went on to work in other states. “What is disturbing about this investigation is that there are over 7,600 people around the country with fraudulent nursing credentials who are potentially in critical healthcare roles treating patients,” the DOJ noted. “Were it not for the diligence and hard work of the investigators on this case, the extent of this fraud may not have been discovered.”
Civil and Regulatory Liability
Employers who unwittingly hire people with fake diplomas or credentials are at risk for both civil and regulatory liability, says Bruce D. Lamb, JD, shareholder with Gunster in Tampa, FL.
“On the civil liability side, it would be kind of a sexy case for plaintiffs’ attorneys. It’s easy to inflame a jury if you’ve got somebody unqualified working and doing things, which makes it an attractive case for that,” Lamb says. “Depending on how good of a pretender these people were, and what kind of work they were doing, there may be defenses that could be raised in that regard. If there was harm, it’s basically an easy win for the plane of effect. If there was negligence in the credentialing, maybe it should be. Then, it’s a matter of [calculating] the damages and how to best resolve the case at that point.”
On the regulatory side, it may be harder for states to act. Some states have enacted statutory provisions that allow for monetary damages. For example, in Florida, a patient’s bill of rights is applicable to nursing homes and creates other standards that are not from common law. They may also give rise to lesser burdens of proof, or waiving of certain elements, or attorneys’ fees, Lamb says.
Those kinds of statutory enactments are intended to encourage healthcare providers to be mindful of potential risks by increasing their financial risk, and their impact would have to be analyzed in a case involving fake credentials. The typical charge on someone who is not qualified is improper delegation, Lamb explains. This carries with it an element of intent, or at least recklessness.
“Simple negligence would not really establish improper delegation. The burden would be higher on the state,” Lamb says. “In addition, in most states, including Florida, the burden of proof is clear and convincing evidence, which is a higher standard than the civil standard by preponderance. I think that it would be more difficult for a state agency to take an action.”
Lamb has seen actions based on individual practices or facilities hiring unqualified individuals, many of them with people using someone else’s name. Some of the people were fairly sophisticated in their knowledge of the field, possibly because they had undergone training in a field but did not graduate or become certified. Others may have immigrated from another country where they were properly credentialed but they cannot obtain U.S. certification.
Sometimes, people go into public databases and steal the identity of someone who is properly credentialed, Lamb says. When the employer attempts to verify the credentials, they may appear legitimate.
“When the state takes action in cases like that, most of those have been settled for fairly minor penalties. I don’t know of any that have been litigated. But again, that burden would be improper delegation, which I think is a fairly high burden, if someone wanted to litigate it and try to defend the accusation against the facility license,” Lamb notes. “In most of the instances I’ve been referring to, they’re small practices that fire an RN or an LPN and they later find out that the person is not the same individual. The burden is higher in the regulatory scheme, but there’s still a risk.”
Verify Submitted Credentials
Healthcare employers should take reasonable steps to verify submitted credentials, Lamb says. It is rare for an employer to go beyond confirming state licensure and check the college degree or the certification because they assume the state licensing agency has checked that same information.
The standard in the industry is to check the state license. This can be handled in different ways. Some employers require a photo of the physical license that shows an expiration date and other information.
“People sometimes just accept that and stop there, which I think is dangerous. If that’s the only thing that’s done, that at least needs to be verified by going to the state database, looking and seeing if that license is, in fact, current and all the information is consistent,” Lamb says. “The employer can be fooled by someone who has stolen an identity for that purpose. In the current circumstances, I think it would be appropriate for employers to consider looking for an address of record. Sometimes, there is an email that’s recorded by the licensee with the state, and you can use that to reach out.”
If the correspondence or email goes to the true holder of the credentials rather than the imposter, an employer can be alerted to the fact that he or she is not applying for the job, Lamb says. All such efforts and responses should be carefully documented.
“You also can have addresses that don’t add up geographically to where they supposedly are working, and that’s a huge red flag,” Lamb says. “Some people don’t always change their addresses. But if you went and found that, in fact, you have a bona fide person you’re interviewing and their address is geographically not consistent with the place of employment, you can tell them they need to update their addresses. That is an obligation on all licensees.” If an employer does discover an imposter, it probably is not obligated to report the person to the state, he says.
In Florida, a healthcare practitioner is obligated to report another practitioner who has violated what the state calls practice acts, which control their professional performance. An imposter would not fit within that obligation because the bad actor is not the licensee.
“I think that there is not an obligation as such, but there are protections, at least in Florida, when you do file complaints from civil lawsuits,” Lamb explains. “As long as you report something in good faith, then you are protected from a libel and slander lawsuit. I certainly would think that it would be appropriate for a report, but there’s not an obligation that I’m aware of.”
Multiple Risks for Employers
There are many significant risks attendant to hiring healthcare workers who purport to be qualified when they are not, says Elizabeth L.B. Greene, JD, partner with Mirick O’Connell in Worcester, MA. The unethical and fraudulent behavior puts patients at risk of substandard care, potential abuse, and neglect. Unqualified clinicians also create risk through their association with other qualified providers who unknowingly rely on their unqualified colleagues.
“Patient harms by unqualified clinicians may lead to malpractice lawsuits that may impact other, qualified providers and the system that employs them both,” Greene explains. “Discovery by a patient’s attorney of the unqualified clinician will likely significantly increase the costs to resolve such a case. Such cases would be difficult to defend at trial, as there is a high risk of the jury finding against all the defendants, particularly the system that hired the unqualified clinician. Unqualified clinicians erode the public’s trust in healthcare systems.”
Other risks to a healthcare system include the healthcare fraud and abuse laws, which carry civil and criminal penalties, Greene says. The work of unqualified healthcare workers generates fraudulent billing for healthcare systems, for which the risk to the offender includes fines and jail time.
These risks also may affect the system that submits the fraudulent billings for the unqualified provider’s work. For example, the False Claims Act (FCA) and the Civil Monetary Penalties Act (CMPA) each prohibit presenting a claim to the U.S. government the claimant knew or should have known was “false, fictitious, or fraudulent,” Greene notes. Under the FCA, each fraudulent claim submitted is a violation of the law.
Could Be Excluded from Federal Programs
Violations of the CMPA carry the risk of exclusion from federal healthcare payor programs. Another risk is the Exclusion Statute, which requires the Office of Inspector General to exclude from participation in all federal healthcare programs individuals and entities convicted of criminal offenses, including Medicare or Medicaid billing fraud, and patient abuse/neglect. Hiring unqualified people to provide care could contribute to both.
While there are defenses for the unknowing systems, the risk to them lies in the “knew or should have known” standard and may involve investigation of when the system should have known of the unqualified clinician, as well as all the claims for payment submitted.
Unqualified workers can blend in when an organization employs so many providers that an unknown or new face is not unexpected or concerning to providers. “Robust hiring processes that do not run afoul of antidiscrimination laws but do carefully evaluate the qualifications a person has for the job are one of the best protections,” Greene says. “However, this can be challenging in the face of increasingly convincing fraud schemes. Outside of the hiring sphere, a culture of safety in a hospital can help avoid this and other risks. Appropriately increased security measures can protect from violence and fraudulent providers.”
REFERENCE
- United States Attorney’s Office Southern District of Florida. Fraudulent nursing diploma scheme leads to federal charges against 25 defendants. Jan. 25, 2023.
SOURCES
- Bruce D. Lamb, JD, Shareholder, Gunster, Tampa, FL. Phone: (813) 222-6605. Email: [email protected].
- Elizabeth L.B. Greene, JD, Partner, Mirick O’Connell, Worcester, MA. Phone: (508) 860-1514. Email: [email protected].
Employees with falsified credentials can pose a serious threat to patient safety and expose healthcare employers to great liability. Civil and regulatory consequences can occur.
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