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

The Business Journal reported an incredible story about Sunrise Senior Living giving bonuses to executives who have lost $16 million in the last year.  This is what is wrong with Corporate America.  Sunrise takes taxpayer money through Medicaid and Medicare; provides poor care while stuffing their pockets, and then before declaring bankruptcy siphon the rest of the money by paying themselves bonuses for poor performance.. 

Sunrise Senior Living, Inc., is paying 2010 bonus payments to its executive officers, equal to one-third of their respective target annual bonus amounts, according to a filing with the Securities and Exchange Commission. The compensation committee of the company's board will pay CEO Mark Ordan $325,000, while CFO Julie Pangelinan and CIO Gregory Neeb will receive $133,333 each.

As stated in the SEC filing, the "compensation committee" awarded the bonuses to these executive for their “extraordinary work” during the recession. Sunrise reported a net loss of $16 million during the first quarter of 2010. The company is also in default on $241 million of debt.

All three executives remain eligible to receive the remainder of their 2010 bonuses at the discretion of the compensation committee.

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Palm Beach Post ran an interesting article about possible Medicaid Fraud.  As taxpayers, we should all be outraged when nursing homes take money for patient care and use it for other reasons such as perks, bonuses, and profit.  Medicaid auditors have disallowed more than a half-million dollars in "operating costs" at a Pahokee nursing home.  The audit only looked at a limited period, 2003-2004, and concluded nearly $672,000 in operating expenses did not merit reimbursement by the government.  Hopefully, they will audit additional years to find the millions taken in Mediciad funds.  Government money provides most of the revenue at the 120-bed nursing home, where the annual operating budget runs between $5 million and $10 million.

Among the red flags: Billing the government for automobile expenses "not supported as business-related" at Glades Health Care Center.  The Post examined spending on hot tubs, Cadillacs, BMWs and other luxury cars, along with hefty pay for executives and their family members at Glades Health Care Center and related organizations over several years.

A spokeswoman for the state's Agency for Health Care Administration said she was not aware of other audits currently under way against the chain of nursing homes, though she could not rule out further inquiries.  Why aren't they doing audits for other years?

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WBIR.com had a story about a Tennessee nursing home getting caught billing Medicaid for employee bonuses.   Many times Medicaid fraud occurs when nursing homes are being compensated for services they never provided.  It is a waste of taxpayer money and should be strictly enforced as Medicaid fraud.

In the case discussed in the story, the nursing home was over billing TennCare for excessive employee bonuses.  Wayne County Nursing Home and its administrators have agreed to pay $200,000 to settle claims that the home billed the state's expanded Medicaid program too much for bonuses.  It shocks me that nursing homes can use any Medicaid money to pay bonuses for non-licensed health care providers like Administrators.

Attorney General Bob Cooper said state law requires bonuses to be "reasonable", but these bonuses totaled over $1.3 million.   Of course, the state law doesn't define what is reasonable nor do they require that the nursing homes have sufficient staff, deficiency free surveys or any other indicia of good care before allowing these excessive bonuses.  The bonuses were 40 percent of the employees' annual salary in 2004 and were billed to TennCare through the nursing home's cost reports.

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