South Carolina Nursing Home Blog : South Carolina Nursing Home Lawyer & Attorney : Poliakoff & Associates Law Firm : Elderly Care, Senior Care

The Chicago Tribune had an article about new details in the OmniCare kickback scheme that included many of the country's for profit nursing home chains.  Omnicare — which supplies medicine to roughly 1.4 million nursing home residents in facilities across the U.S. and enjoys an 85 percent share of this market.  Court documents add new details to a whistle-blower lawsuit alleging that the giant pharmaceutical firm Omnicare Inc. paid kickbacks to Illinois' most prominent nursing home families.

The new filing, which contains 164 pages of internal company records and other documents, is intended to bolster pending civil allegations that Omnicare significantly inflated the purchase price it paid in 2004 for a pharmacy company purportedly controlled by Chicago nursing home operators Philip Esformes and his father, Morris Esformes.

Omnicare's $32 million purchase of that company, Total Pharmacy, included roughly $16 million that was a kickback to secure long-term pharmacy contracts with nearly three dozen nursing homes the Esformeses operated or controlled

The new documents include copies of handwritten notes from a March 2004 meeting at Morris Esformes' Lincolnwood headquarters between Omnicare CEO Joel Gemunder and Morris Esformes to discuss the sale of Total Pharmacy to Omnicare.   Gemunder offered to pay $15 million for Total Pharmacy if three-year contracts were in place with Esformes-controlled homes, $20 million if there were five-year contracts and $25 million if there were 10-year contracts. In the final sale, Omnicare paid the $25 million and let Total Pharmacy keep $7 million worth of accounts receivable, making the sale worth $32 million.

The new court filing also includes other handwritten notes taken two days after the meeting that allegedly show Morris Esformes agreed to backdate nursing home pharmacy contracts "in order to avoid the appearance of impropriety," according to the lawsuit.

Philip and Morris Esformes, who are listed as part-owners of 28 nursing homes in Illinois and Florida, and had ties to others in Missouri, have not been charged with any crime in the sale of Total Pharmacy.

The whitsle blowers include two industry insiders: pharmacy executive Maureen Nehls, who served as vice president of pharmacy operations for Total Pharmacy, and former health care dealmaker Adam Resnick, a consultant to Total Pharmacy at the time of the sale.

The Tribune in April reported that the Esformeses were embroiled in what prosecutors called a "horrific" patient-brokering scheme in which unsuspecting nursing home residents were shuttled to and from a local psychiatric hospital for unnecessary treatments. 

Government authorities in Boston have won settlements in federal court based on Resnick's information about other deals involving Omnicare and separate East Coast nursing home chains including Mariner and SavaSeniorCare owned and operated ath time by Murray Forman and Leonard Grunstein.

The False Claims Act allows private citizens to file lawsuits against companies and individuals defrauding the government and recover funds on the government's behalf.

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Barbara Quirk wrote an article on The Cap Times regarding certain aspects of the Affordable Care Act.  The federal Department of Health and Human Services announced the availability of $60 million in Affordable Care Act grants to help people navigate their health and long-term care options. Through these grants, HHS’s Administration on Aging will collaborate with the Centers for Medicare and Medicaid (CMS) to encourage an integrated approach to health care and social services. It is a model that has long been recognized as essential for patients and their caregivers.

“The Affordable Care Act seeks to lower health care costs, improve the quality of health care and, perhaps most importantly, give people more control over their own care. These new grants, authorized under the new law, will help seniors, individuals with disabilities and their families get better quality care and more control. We’ve also streamlined the process for states and people who rely on these funds,” said HHS Secretary Kathleen Sebelius.

“We know how difficult it can be for caregivers and patients to try and deal with a sudden illness or chronic disease while at the same time trying to negotiate through a complex health care system to figure where you can get help. These new funds that we have bundled together will help promote better opportunities for coordination of health and long-term supports,” said Sebelius.

“When it comes to long-term health care, each patient has a unique mix of complex medical and social needs that must be considered when seeking care,” says Marilyn Tavenner, acting CMS administrator. “Our health care system can offer many options to meeting those needs from traditional nursing home care to home and community-based services. Making patients and their families aware of these options will help them make inherently difficult decisions about long-term care. The integrated program will help families make informed choices and make sure patients have more control over their own care.”

This is part of a larger nationwide effort to bring direct-care workers into positions of respect and acknowledgment by giving the patients or the families a bigger voice in decisions about working conditions and wages. Whether in a traditional nursing home setting or an in-home setting, a critical factor is continuity of care.

Basic to any effort to improve long-term care is retaining, supporting and strengthening this core group of personal care providers.

Affordable Care Act funds will be available to states, area agencies on aging and Aging and Disability Resource Centers to coordinate and continue to encourage the use of tested Care Transitions Program models that integrate the medical and social service systems. This will smooth the transition of individuals from hospitals and nursing homes back to their communities and homes.

Barbara Quirk is a Madison geriatric nurse practitioner. Tandbquirk@aol.com
 

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Mother Jones had an article explaining the practical problems with the Medicare Secondary Payer Act which allows the government to take money from settlements of victims of neglect and abuse.

In 1995, Sumaya Coury was driving her 81-year-old mother, Mollie Coury, back to Los Angeles after a trip to San Diego to play bingo. Sumaya's Cadillac slammed into the car of a drunk driver who'd parked and passed out in the middle of the five-lane 210 freeway, east of Pasadena. Mollie's legs were crushed; doctors thought she'd never walk again. But after weeks in hospital, she regained her mobility, and eventually put the accident behind her. Then, 13 years later, in the fall of 2008, Medicare sent Mollie some staggering news: She owed $66,000 for what the agency said were medical expenses related to the accident. If she didn't pay within 60 days, the Treasury Department would seize her Social Security checks until the money was repaid.

After the accident, Coury had received about $20,000 from her daughter's insurance policy for medical bills, permanent impairment, and pain and suffering. This settlement subjected her to  Medicare Secondary Payer Act, created decades ago to prevent Medicare from paying medical expenses that were the responsibility of private insurers or other parties. Here's how it works: If a Medicare recipient gets in a car crash or is injured by a defective pacemaker, the government picks up the hospital tab. But if that person receives a payment from a legal settlement, insurance policy, or jury award that covers accident-related medical bills, Medicare is entitled to its money back.

Reimbursements saved taxpayers nearly $7 billion in 2008, according to the Centers for Medicare and Medicaid Services (CMS). In recent years, Congress has pushed Medicare to aggressively pursue debts from injured elderly people who have won compensation through lawsuits or liability insurance.

Coury actually got snared in Medicare's net twice, the first time in 2002, when the agency began seizing her only income, a $498 monthly Social Security check, for nearly three years until she repaid more than $16,000 (her settlement minus some legal fees). After that, she thought her troubles were over. But in 2008, Medicare returned for more. Its $66,000 bill not only failed to recognize that Coury had already repaid what she owed; it also far exceeded the $20,000 she'd received from her daughter's insurance company in the first place. Eventually, Sumaya, a former accountant, discovered that Medicare had included every procedure Mollie had undergone since her accident, including unrelated care like open-heart surgery and treatment for emphysema.

Sumaya, who was herself battling lung cancer, tried repeatedly to straighten out the problem. Instead, Medicare stopped paying her mother's medical bills. Mollie so feared visiting the doctor that when she suffered internal bleeding from complications from a hiatal hernia, she refused to go to the hospital and nearly died. "It's like a nightmare," says Sumaya. "They should be paying her for all the harassment."

Medicare's debt recovery program has not been a model of efficiency. The Government Accountability Office discovered that during the 2001 fiscal year, other parties were responsible for nearly $2 billion in outstanding Medicare debts, but the Centers for Medicare and Medicaid Services had only referred about $47 million for collection. In the 2003 fiscal year, the agency employed more than 50 collection contractors, yet recouped just 38 cents for every dollar it spent trying to gather old debt from employer-sponsored health plans. During that same period, eight of those contractors didn't process a single case, yet still received a total of $1.8 million.

Congress pressed CMS for improvements. So in 2006, the agency consolidated collection activities into one massive contract, worth $72.5 million in the first two years. Under a law permitting the government to grant no-bid contracts to Native American corporations, it awarded the deal to Chickasaw Nation Industries, based just outside of Oklahoma City. The contract gave the firm $32.5 million the first year and $40 million the second. (Michael Webb, CNI's head of business development, says the agency granted the sole-source contract based on work the company was already doing handling medical records for the Indian Health Service.) It was CNI that sent Coury her $66,000 bill. However, agency officials said mistakes were inevitable in a system that processes more than 300,000 new liability claims and more than a million pieces of correspondence every year.

According to CMS officials, the Chickasaws have stepped up Medicare recoveries, but errors persist.  The issue was headed to the Supreme Court, but in 2003, Congress passed the Medicare drug benefit and included a small provision that officially put the onus on lawyers to make sure Medicare got its money.

Medicare often can't tell them just how much their clients owe. When it does, it's often spectacularly wrong.   After forcing plaintiffs' lawyers to serve as Medicare's debt collectors failed to produce the desired results, Congress passed new debt-collection measures as part of the 2007 SCHIP reauthorization. Starting next year, insurance companies must report any settlements or judgments involving Medicare beneficiaries to CMS. If a Medicare beneficiary fails to reimburse the agency for health care costs it paid, the agency can punish the insurance company with double damages.

Take the case of 87-year-old Hannah Cohen, who was hit by a car in 2005. She sued the driver and got an $18,000 settlement in December 2007. Knowing that the feds were more aggressively pursuing such payments, the driver's insurance company had a policy of making Medicare a payee on any settlement check for plaintiffs older than 62. But Cohen, an Israeli citizen, was ineligible for Medicare, and therefore owed nothing. Still, it took more than a year—and a lawsuit—for Cohen's lawyer to extract her money from the insurance and Medicare bureaucracy. Cohen's lawyer has another similar case pending.

After all of Sumaya Coury's calls and letters, in March, a contractor working for Medicare wrote to say that her mother, who is now 95, now owes only $18,378.40—a little more than the amount she repaid four years ago. Sumaya hired a lawyer to deal with the mess. One day, she says, she complained to an employee of the Chickasaw contractor that the situation was "totally bizarre." The woman replied, "Oh no, it's not. It happens every day."
 

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Here is a link to The Frederick News-Post which had a terrific op-ed by Katherine Heerbrandt about accountability and the nursing home industry.  The editorial is below:

Nursing homes are places where residents go about the business of wrapping up their lives or recuperating from illness, so it's not surprising that many of us have an aversion to them. Perhaps we see a future we don't want to contemplate.  But as baby boomers age, living out our golden years in a long-term care facility is a real possibility. The size of the disabled older population who will need assisted or nursing home care will grow by more than 50 percent between 2000 and 2040, according to the Urban Institute.

Entrepreneurs are looking at long-term care facilities as good investments. But as private equity investors flood into the nursing home business, "it's become harder and harder for families, regulators or prosecutors to identify the right individual or business entity to hold accountable for bad care," Janet Wells, public policy director of National Citizens' for Nursing Care Reform, said in an interview.

"The Office of Inspector General says it has found as many as 17 limited liability companies in the ownership and operations of a single facility," Wells said. "Most of these companies are making profits from the business, but they can't be held accountable by anyone for what happens to an individual resident."

This trend, she said, triggered a transparency bill this year and is part of the controversial health care reform legislation currently before Congress. A similar bill failed last year, and compromises were made. The bill currently before the House requires Nursing Home Compare (Medicare.gov/NHCompare/home/asp) to report the number of adjudicated criminal violations by facilities or crimes committed by their employees. States will also have to post survey reports online so consumers can read the inspectors' findings.

It's an uphill battle for advocacy groups. Nursing home lobbyists have much deeper pockets. "The nursing home industry is extremely powerful," Wells said. "And although it claims it can't make a profit from operating nursing homes, spends hundreds of thousands of dollars on campaign contributions and lobbying."

Lobbying, it seems, is a recession-proof profession. In the past decade, nursing home lobbyists' spending has risen from $25 million to $100 million, according to opensecrets.org, maintained by the Center for Responsible Politics.

Tyonja Bathgate became an unwilling advocate for nursing home residents' rights when her husband, Colin, moved to a local long-term care facility two years ago, and she worked with Delegate Sue Hecht on a bill to allow cameras in nursing homes. That bill failed this year.

Based on her experiences, Bathgate supports any legislation that will make nursing home operators more accountable and their operations more transparent.

Even if you or a loved one is not in a nursing home, she said, you are still affected by this legislation.

"Where do you think Medicare/Medicaid comes from? Those are tax dollars and nursing homes shouldn't be able to hide behind LLCs, or to spend millions on lobbyists. That's ridiculous," she said.

She's right. Why shouldn't the facilities entrusted with caring for our nation's chronically ill and elderly be held accountable for how they run their businesses?

For sample letters to your representatives and more information on the details of the nursing home transparency legislation, visit nccnhr.org.
 

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There was a great editorial letter recently by Diana Rhodes in the Casper Star-Tribune Online discussing the need for updated regulations and reforms in the nursing home industry.  Below is a copy of the letter. 

Congress hasn't passed legislation to improve nursing home care since 1987. It has a chance to do so now in health care reform.

There have been a lot of changes in the nursing home industry in two decades -- not all of them good. Several large chains have been bought out by global private equity investors; in fact, a majority of nursing homes are owned by for-profit corporations. The way these companies structure themselves, even our state health regulators can't tell who owns them sometimes, especially when the owners are out-of-state. This can create a dangerous situation for the residents, because no one is truly accountable for what happens to them.

The Nursing Home Transparency and Improvement Act is part of the draft health care reform bills that the House and Senate are considering. It would make nursing homes disclose their owners and operators. It would also give families a lot more information about the nursing homes they put their loved ones in, including whether they have adequate staff. It would help the federal government get better oversight over these multi-state chains.

I want to urge Sen. John Barrasso, Sen. Mike Enzi, and Rep. Cynthia Lummis to support nursing home transparency and improvement in health care reform. The elderly and people with disabilities in our state deserve nursing homes that are transparent and accountable, and families need information to make good choices when they choose a nursing home for someone.

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Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI) reintroduced the Nursing Home Transparency and Improvement Act, a bill that would give consumers more information about individual nursing homes and their track record of care, give the government better tools for enforcing high quality standards, and encourage homes to improve on their own.

"Improving the quality of care in nursing homes is a constant challenge. More transparency, better enforcement and improved staff training are needed, and this legislation works to make changes in those areas and improve the quality of life of nursing home residents and to empower the family members and loved ones of those residents," Grassley said.

"Twenty-two years have passed since Congress last addressed the safety and quality of America's nursing homes in a comprehensive way," said Kohl. "As we prepare to debate reforms across our health care system, there has never been a better time to implement critical improvements to our nation's system of nursing homes. And as the GAO report demonstrates, many of these improvements are past due."

In addition to the bill introduced today, Grassley and Kohl released a U.S. Government Accountability Office (GAO) report entitled "Medicare and Medicaid Participating Facilities: CMS Needs to Reexamine Its Approach for Oversight of Health Care Facilities." This report suggests that the survey and certification system is significantly underfunded relative to the scope of its oversight responsibilities, which have greatly expanded in recent years. The report found that survey frequencies have greatly lengthened due to resource constraints, resulting in some facilities receiving inspections only once every ten years. The Nursing Home Transparency and Improvement Act seeks to bolster the federal government's survey and certification system.

Grassley is ranking member and former chairman of the Committee on Finance, with jurisdiction over the federal health care programs that cover nursing home care, and former chairman of the Special Committee on Aging. Kohl is chairman of the Special Committee on Aging, a standing committee that conducts oversight of issues related to the health, safety, and financial well-being of older Americans. The Grassley-Kohl bill is the product of their work together on nursing home quality, which has helped to generate some positive results in recent years, including the government's new five-star nursing home rating system and the release of the Special Focus Facility program participant list, consisting of the 135 worst nursing homes in the country.

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A nursing home abuse bill, the Elder Justice Act, has been under consideration in Congress but has yet to be passed. Although nursing home and elder abuse are serious and growing problems, the nursing home abuse bill has never even been voted on. While no one in Congress opposes the nursing home abuse legislation, few are trying to push it through the legislative process.

But the issue of nursing home abuse should be getting more attention, just based on the shear numbers of elderly affected by this crime. Though it concedes that the true number is probably much higher, The National Center on Elder Abuse estimates at least one in 20 nursing home patients has been the victim of abuse.

According to the National Center’s study, 57% of nurses’ aides working in long-term care facilities admitted to having witnessed, and even participating in, acts of abuse. The report sites systemic problems within the nursing home industry, like inadequate pay for workers and chronic understaffing, as contributing to the epidemic of abuse. There are nearly 1.4 million Americans living in nursing homes right now, and that number is expected to more than double in the next decade. As it does, advocates for the elderly and disabled fear that incidences of abuse will continue to climb as well. 

The Elder Justice Act would set up separate elderly justice offices in the U.S. Departments of Justice and Health and Human Services, provide $400 million for state adult protective services over four years and create a federal coordinating committee among agencies to monitor and direct the government’s efforts. The bill would also establish forensic centers around the country to probe elderly abuse cases and give local prosecutors more support in bringing cases. And it would penalize nursing homes if they did not report crimes swiftly. 

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Buried within most admission contracts for nursing homes are unconscionable and hidden clauses requiring mandatory binding arbitration in case of a dispute. These clauses stack the deck against consumers and victims of nursing home abuse and neglect.  These hidden clauses force residents to sign away their rights before a dispute even arises, and denying them access to the courts, often the only place regular Americans can face powerful interests on a level playing field. 

The Arbitration Fairness Act of 2007 would secure citizens’ seventh amendment right to a trial by jury and allow consumers to get a fair opportunity.

In arbitration, consumers are forced into a private legal system that is stacked against regular Americans, where they must pay steep filing fees—often more than $750 just to file a case. These fees do not include the arbitrators’ hourly charges, which range from $200 to $500 per hour, often bringing the total cost of arbitration to tens of thousands of dollars for consumers.

While in arbitration, consumers’ fates are in the hands of a supposedly impartial arbitrator. However, the arbitrators are often biased in favor of businesses, since they will be repeat users of a particular arbitrator. Once an arbitrator reaches a decision, it is almost impossible to appeal and the arbitrators do not have to justify any of their findings.

The Arbitration Fairness Act of 2007 would eliminate these unfair contracts and preserve the right to a trial by jury—a pillar of our civil justice system.

We urge you to take action by telling your Senators and Representative to oppose binding mandatory arbitration clauses in consumers’ contracts by supporting the Arbitration Fairness Act of 2007.

Please go this website and fill out this form to fight mandatory arbitration

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