When Ms H was offered the job of director of nursing for a home healthcare provider group, she was delighted. The pay was generous, the hours were regular, and the job would allow her to spend more time with her young children, something her previous job did not.
The home healthcare group would receive referrals of patients from other healthcare providers (physicians, hospitals, or nursing homes) for specific home healthcare services, such as physical therapy. As director of nursing, it was Ms H’s job to review the patient referrals and determine whether her employer had available staff to fulfill the physician’s orders and care for the patient. Ms H could either accept the patient or recommend that the referral be declined.
If Ms H accepted the patient, the enrollment process began with a clinical assessment of the patient’s medical needs to determine whether the home healthcare plan should differ from the doctor’s orders. Clinical staff might find that the prescribed services were not appropriate for the patient or that the patient needed additional services. In either case, the physician would be notified and given an opportunity to make the final decision as to whether the change was appropriate. After the patient was accepted, it was Ms H’s job to complete the paperwork necessary to bill Medicaid, Medicare, or private insurance.
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After working there for several months, Ms H began noticing some disturbing things. She found out that several employees were regularly bypassing proper procedure and were admitting patients without the required clinical assessment or documentation. She also found that patients were being admitted for services even when the home healthcare company could not accommodate their medical needs. Physicians’ orders were being changed to match the availability of clinical staff. In some cases, patients were being admitted without proper documentation from a physician.
Ms H continued to do everything “by the book,” but she became increasingly concerned about what others were doing, which she considered fraud. After discussing the situation with her husband, she decided to bring it up to management. Timidly, she brought up some of the issues she had been noticing, but management brushed off her concerns.
As the months passed, Ms H tried again on numerous occasions to report the issues but was invariably ignored by management. One senior manager actually laughed when she reported the issue, telling her that the fraudulent scheme brought in $6 million annually.
Ms H did not know what to do. Although she was not manipulating the patient enrollment process, her duties required her to allocate clinical staff to new patients and to fill out payment paperwork from Medicare, Medicaid, and private insurers. Continuing to fulfill these duties, she believed, would inevitably require her to commit fraud and violate her nursing license. In this no-win situation, she believed that resigning from the position was preferable to being party to an illegal scheme. She quit her job and then hired an attorney. The attorney filed a lawsuit against Ms H’s former employer, alleging that it violated the law by constructively discharging her. The employer made a motion to dismiss, claiming that Ms H quit and was not discharged. The district court agreed with the employer, holding that Ms H had failed to state a valid cause of action. While the court understood Ms H’s decision to quit to avoid participating in fraud, it held that the employer did not demonstrate a specific intent to force Ms H from her job. Without that intent by the employer, according to the court, Ms H’s claims failed. The lower court dismissed the case. Ms H appealed.
On appeal, the appellate court reversed the lower court’s decision and held that Ms H could sue her employer for wrongful termination, even though she had quit the job rather than be fired.
