A Bellevue-based health care staffing company that specializes in serving nursing homes, rehabilitation and assisted living facilities in Oregon and other western states has settled two whistleblower suits accusing it of whistleblower retaliation, poor patient care and widespread fraudulent billing.
Daiya Healthcare and its CEO, Dr. Bhupinder Walia, did not respond to requests for comment from The Lund Report.
In a court filing on Sept. 16, attorneys for the Western Washington U.S. Attorney’s Office and Washington State Attorney General Bob Ferguson submitted a motion noting that both the federal government and state of Washington had intervened in the case to enter into a settlement of claims. The filing did not include the actual settlement, and a spokesperson for Ferguson did not immediately respond to an email from The Lund Report.
On the same day of the settlement of that whistleblower case with the federal and state government, the same federal attorney filed a motion in a separate whistleblower case noting that it, too, had been settled.
Both cases had been pending for years, with one filed in 2020 and the other in 2022. Throughout that time, the federal government had been actively investigating the suits’ very similar claims of fraud, according to filings that were unsealed last week.
Typically, the company entering such settlements does not admit to the allegations, so the fact of a settlement does not indicate whether an allegation made was true or false. According to a post on the firm’s Facebook page, “At Daiya Healthcare, we believe in setting community standards and exceeding expectations.”
Daiya employs hundreds of physicians, nurse practitioners, pharmacists, nurses, physician assistants and other providers to serve more than 60 facilities owned by other companies in Washington, Oregon, California, Hawaii, Idaho and New Mexico, according to the suits. The suits do not include a list of facilities served by Daiya but the employment website Indeed lists job openings in Gresham, Portland and Vancouver, Washington, among others.
The lawsuits made very similar claims that patients were subjected to unnecessary care visits and that those visits were “upcoded” to reflect higher intensity care than was actually delivered.
Suit claims fraud, poor care
The first came in October 2020 when Jeanette Nyman, an advanced registered nurse practitioner, filed a detailed 17-page lawsuit against Daiya.
Nyman, in her suit, said that management required providers to see 16 patients per day, and if any were canceled, they’d have to see another patient instead. She said the high quota meant some patients were receiving unneeded care, while others did not receive the care they needed.
“Because of the 16 patient per day mandate, providers are frequently unable to spend enough time with some acute patients to manage their care, while for others they are encouraged to ‘upcode’ as well as provide unnecessary treatment and/or false billing,” according to the suit. “Multiple acute patients were removed from the facilities by family or guardians due to inadequate care, and others were admitted to hospital due to inadequate care in part caused by the pressure on providers for 16 or more billing visits per day.”
Nyman, hired as a pain specialist, found herself having to meet with patients who had no need for care or who had indications for other conditions not involving pain, according to her suit. One subordinate would duck her head into a patient room and look at a patient without significant contact in order to log a purported health care visit, the suit claimed.
“Each visit is billed to the government, whether healthcare services were needed or not,” according to the suit, which called the practice “fraudulent.”
While typically lower-level staff served multiple facilities, some providers saw patients only via telehealth appointments, according to her suit.
While it does not list all facilities served by Daiya, Nyman worked at a Prestige facility in Centralia, Foss Home and Village in Seattle, Aldercrest Rehab in Shoreline, and Burien Nursing and Rehab in Burien, according to the suit.
Later, she worked at Fir Lane Health and Rehabilitation operated by Cornerstone Healthcare Services in Shelton, Washington, tending to 84 patients. There, she followed opioid prescribing guidelines calling for patients to be tapered off the addictive medication when possible.
According to the suit, Nyman was terminated, and later heard from a coworker who assisted Daiya executives that they removed Nyman “out of fear that she would report substandard care and overmedication of patients on opioids.”
Daiya is also settling a second lawsuit filed by a different advanced registered nurse practitioner who made similar claims, according to a Sept. 16 filing by a federal attorney.
Daiya also faced a third, very similar suit filed in 2021 by two former employees who said they faced retaliation for reporting concerns of fraud. Daiya and the former employees’ lawyer agreed to a joint voluntary dismissal, suggesting a settlement may have been reached.
