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

The Des Moines Register reported the investigation and charges filed against Emeritus (one of the nation's largest senior living companies) for operating an unlicensed assisted living facility and misrepresenting their licensure status to the public.  Emeritus at Silver Pines is a Cedar Rapids home licensed as a residential care facility that can provide personal assistance and supervision, but no nursing care.  Over the past 30 months, the owners of the 72-bed facility have allegedly promoted the home as an assisted living center that is authorized, equipped and staffed to provide residents with a relatively high level of medical assistance and care. The Iowa Department of Inspections and Appeals has temporarily barred the home from accepting new residents, imposed a $13,000 fine and ordered the owners to hire a new administrator.

Emeritus is the nation's largest assisted-living company, with annual revenue of $900 million. It operates 308 senior-living communities in 36 states, with a total potential capacity for 32,300 residents. The chain recently purchased an additional 140 homes from the bankrupt Sun West chain of care facilities.

Emeritus could face criminal charges for falsely claiming to be a state-licensed assisted living center.  It's a crime in Iowa for a company to falsely claim that it's a state-licensed assisted living facility, h, and the Iowa Department of Inspections and Appeals plans to refer the matter to county prosecutors for consideration of criminal charges.

Disabled Iowans - some near death and in need of constant supervision or skilled nursing care - signed contracts with the home that specifically described the facility as "licensed by the state of Iowa as an assisted-living facility." In some cases, residents were referred to Emeritus by physicians who were led to believe that the home was licensed to provide skilled nursing care.

Company records indicate the home has been charging each of the residents up to $3,800 per month in fees. In at least one instance, it allegedly charged a resident $10,000 as a nonrefundable "move-in fee."

The company's false claims should have been uncovered in March when inspectors visited the home.  Emeritus was cited for having two residents whose medical needs could be met only by an assisted living center or a nursing home. The home promised that in the future it would only admit people who were suitable for a residential care facility. In July, inspectors revisited the home in response to a complaint and saw the problem was much larger in scope than they had previously believed. For at least 30 months, the home had been holding itself out as an assisted living center. Some of the residents were being treated for cancer, kidney failure and severe dementia. Some were receiving hospice care.  In all, 17 residents were judged to be in need of care above and beyond what could be legally provided by the home.

State inspectors determined the home's new administrator, hired just a few weeks before, had no education or experience pertaining to the management of a residential care facility and didn't meet the minimum legal requirements to run such a facility.

The home's website and automated telephone system continued to promote the home as "the assisted living community of choice."

Emeritus Senior Living owns two other Iowa care facilities: Northpark Place Senior Living Community in Sioux City, a residential care facility the company purchased on Aug. 5, and Emeritus of Urbandale, a fully licensed assisted living facility that has faced numerous sanctions from the state in the past 18 months.  At one point, the Urbandale facility's on-call registered nurse was a company official who lived in Urbana, Ill., a six-hour drive away.

One employee of the Urbandale facility allegedly admitted to inspectors that she had destroyed a patient's medical records and then created new, fictional reports to conceal the fact that a dying resident's children had to administer medication to their parent on several occasions because no nurse was available in the facility.

The Urbandale home has also been cited for housing a violent individual who assaulted and sexually fondled other residents over a period of several days until police were called and he was escorted from the building.

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Health Leaders Media and the blog Free Market Mojo wrote interesting articles about how Medicare policies increase hospice stays.  The Medicare hospice benefit is designed to provide visits by an interdisciplinary care team to better manage pain and other end of life issues and to provide psychosocial and spiritual support in the nursing home setting for residents and their families.

However, the length of an average Medicare-certified hospice stay in a nursing home has doubled during the last decade, researchers at Brown University have found.  Published in the August Journal of the American Geriatrics Society, their study finds that standard treatment time in nursing homes between 1999 and 2006 has increased from 46 to 93 days.   The study proves that nursing homes make more money by placing a resident on hospice because the standard daily payment rate for most Medicare hospice enrollment acts as an incentive for extended stays.

The study also found that the doubling of Medicare services in nursing homes is related to a 50% growth rate in the number of hospices—primarily for profit hospices.  Stays were longest in states with the greatest provider growth.  At the current time, a third of Medicare beneficiaries who die in nursing homes are accessing hospice services, and the study predicts that this number is expected to increase.

In addition to changing the rates of payment to reflect the proper timing of the more intense care needs, the researchers agree with a Medicare Payment Advisory Commission's recommendation that procedures for determining hospice eligibility recertification should be strengthened.

These changes would help the Medicare system avoid the possible scrutiny of nursing home residents who live beyond the physician certified six month prognosis—a Medicare requirement for hospice eligibility—and would permit patients to access the hospice care when they actually need it. 

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Levin and Associates had an interesting article in The Senior Care Investor discussing the bankruptcy and sale of IHS to THI and eventually Fundamental long Term Care Holdings LLc, owned and operated by Murray Forman and Leonard Grunstein.  Below are excerpts from the article:

Very few people remember what happened a little more than seven years ago, but in early
2003, an unknown entity (at least to the senior care world) stepped in at the last minute and snatched the remaining assets of a bankrupt Integrated Health Services (IHS) from the presumed
buyer, literally on the steps of the court house. Trans Healthcare Inc. (THI) thought it had the deal wrapped up for $97.5 million, but an entity called Abe Briarwood, backed by Cammeby’s
International, swooped in for $114 million in cash and was willing to assume the post-petition Medicaid and Medicare billing liabilities, something that made the court very happy.

We are certain that the founder of Cammeby’s, one Rubin Schron, had no idea where this initial acquisition would take him in the rough and tumble skilled nursing industry....  And, most certainly, he never thought he would now be in court pitted against a man he trusted with everything. After Cammeby’s made the winning bid at the 11th hour, THI at first tried to fight it, but then the two sides settled their differences when Cammeby’s hired THI to run the newly acquired IHS assets.  Then, in May 2004, we caught wind of an acquisition offer that was brewing for the former Mariner Health Care from none other than Cammeby’s, but under the name National Senior Care, and separate from its Integrated Health.  The purchase price for Mariner was just under $1.0 billion, and when you capitalized the lease payments, the total transaction value increased to about $1.25 billion. This resulted in a price per bed of $38,800 and a 9.2x multiple of annualized EBITDAR.  The
deal closed at the end of 2004, but perhaps the most longlasting impact on the target entity, which some time later had a name change to Sava SeniorCare, was the role that Mr. Schron’s attorney, Leonard Grunstein, came to play.
There were really two sets of problems that began to emerge. One was what transpired with the original acquisition of the Integrated Health assets and the role of Trans Healthcare, which eventually came to be known as Fundamental Long Term Care when Fundamental purchased the assets of THI, the sale of which some claim was under duress and fraudulent.  There is a separatelawsuit filed on July 1, 2010, against Leonard Grunstein, his brother Harry, Murray
Forman alleging, among other things, fraudulent conveyance, unjust enrichment, legal malpractice, fraud, breach of fiduciary duty, breach of lease agreements, tortious interference and aiding and abetting fraud. The lawsuit was filed by Allen Bodner and DMV Funding LLC and is seeking no less than $150 million in damages and no less than $300 million in punitive damages.
According to the complaint, Bodner owned 100% of DMV which purchased Cammeby’s loan to the Abe Briarwood/IHS deal, and there are 30 more pages as to what transpired among the various parties. The long and short of the complaint was that the plaintiffs believe they got screwed, to
put it bluntly, by people who were partnering with them and advising them.
The more interesting lawsuit, but sort of related, was filed on June 22, 2010, with Rubin Schron and his various holdings as the plaintiffs against a similar cast of characters including Leonard Grunstein, Murray Forman, the law firm Troutman Sanders, and the various Sava and Mariner
affiliates. To fully appreciate how unusual this lawsuit is, one must always keep in mind that Leonard Grunstein was Rubin Schron’s attorney. ....Mr. Grunstein did much of the legal work involved in the Mariner acquisition and subsequent Opco and Propco set-ups that evolved over time.
The relationship between Mr. Schron and Mr. Grunstein dates back to the 1980s, and according to the complaint, he apparently has referred to himself as Mr. Schron’s “general counsel.” According to the complaint, Mr Schron relied on legal advice from his attorney who began to organize things to the benefit of the attorney, and on financial advisory services from Mr. Forman, who was allegedly in cahoots with Mr. Grunstein. Mr. Schron never wanted to have anything to do with operating the nursing facilities; he just wanted a steady, but increasing, rental stream from the
real estate. In the case of the Mariner acquisition, according to the complaint, Mr. Schron put all the money up and ended up owning the real estate in Propco, while Grunstein/Forman retained ownership of the operating entity created to run the facilities, and all the excess cash flow, plus they received a small share of Propco—all without investing any of their own money.  In addition, according to the complaint filed, Mr. Schron was charged $14 million for financial advice in the Mariner deal by MetCap Advisory Services, which was 25% owned by Mr. Grunstein and 25% owned by Mr. Forman.   Other allegations in the nearly 100-page complaint include loans made to Opco that were never paid back to Mr. Schron, distributions taken by the Grunstein/Forman group
totaling more than $70 million, Grunstein billing Schron for non-existent legal work, and for allegedly not giving Schron the final closing documents for the original Mariner acquisition.
One also needs to remember that all of this recent legal action is on top of several issues earlier this year, when Mr. Grunstein and Mr. Forman sued Mr. Schron for more than $100 million for allegedly misappropriating significant sums of money from various partnerships in which they all had a stake.

And don’t forget that all three of them were defendants together when the Department of Justice charged them all with accepting kickbacks from Omnicare in return for pharmacy contracts. Without admitting guilt, they settled and agreed to pay the federal government $7.8 million
and $6.1 million to certain states.

Over the past two years the owners of Sava (Mariner) have been trying to sell off various pieces of the company (or the whole thing), notably the portfolio of mostly leased assets in California, but with little success. The obvious problems were pricing and financing.  Currently, Sava is the seventh largest skilled nursing company in the country with 184 facilities and 21,279 skilled
beds, and it is larger than half of the publicly traded skilled nursing companies.   Still, we believe that selling the assets is a real outcome, especially for Mr. Schron who we assume wants to be done with his relationship with his former attorney and financial advisor, and may even want to be out of the skilled nursing real estate business altogether. The other side, however, may
still not want to give up their cash cow, but the courts and the credit markets may make the decision for them.

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The Tennessean had an article about the arrest of Regina Jacobs.  The nursing home employee is charged with stealing more than $400,000 from the nursing home where she
worked for more than 10 years. I wonder how long it was going on?  How could she be so greedy?

Officers with the Tennessee Bureau of Investigation arrested her after she was indicted by the Wilson County grand jury on three counts of theft over $60,000, two counts of theft over $10,000 and one count of theft over $1,000.

In December 2008, the nursing home, Quality Care Health Center, finally discovered that Jacobs, a business office manager, had been cashing checks intended to cover patient costs and keeping the money.  An internal investigation and audit at the nursing home revealed that about 70 patients' accounts had been affected.

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Here is another article (from The Orange county Register) about how nursing homes used increased funding to pad their bottom line instead of increasing staffing.  Nursing homes were supposed to use the increased funding to hire more staff and increase the hours per patient.  One again, greed and profits take precedence over the care provided to nursing home residents.

Covenant Care's facilities are among hundreds of California skilled-care centers that received $880 million in additional compensation from the state since 2004 to increase staffing and wages at homes that serve Medi-Cal patients. An analysis by the non-profit newsroom California Watch found that 232 of those homes statewide slashed staff and let nursing ratios fall below the state minimum despite receiving the additional funds.

St. Edna and 12 other homes run by the Aliso Viejo-based Coventant chain were among those that stood out: They accepted $15 million in additional compensation from the state but still cut caregivers, California Watch found. Meanwhile, Covenant Care rewarded facility leaders with bonuses based, in part, on new profits.

The company's marketing promises the "highest quality of care" and a staff that treats consumers as "family." But St. Edna's overall service is rated "much below average" on the California Department of Public Health website – the lowest rating given. Staffing at the facility fell 5 percent between 2004 and 2008, settling below the state minimum of 3.2 hours per patient.

St. Edna received 119 citations and warnings over the past three years, compared with a state average of 54.

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The Buffalo News had an article about nursing home employees embezzling money that should have gone to the resident's care.   Mary Blenker is the second employee of the Absolut nursing and rehabilitation complex in Orchard Park to plead guilty to corporate embezzlement.

Blenker admitted to stealing $13,402 from the disbursement funds she managed for the company’s adult living community and its nursing home from January 2007 until 13 months ago.  Blenker pleaded guilty to felony grand larceny and misdemeanor attempted grand larceny for the thefts before a grand jury reviewed her case.

Blenker, a former administrative assistant for financial affairs at the nursing home complex, was forced to sign confessions of judgment and must make complete restitution.

Rhonda Skiver, Absolut’s former chief financial officer, faces sentencing on her Feb. 19 guilty plea to embezzling more than $163,000 between December 2005 and April 2009.

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The Monterey Herald had an article about two more nursing home operators charged with plotting to defraud the Medicare and Medicaid programs of more than $30 million and providing about 300 elderly residents with "worthless and harmful" care.

George and Rhonda Houser, who ran the Forum Healthcare Group, submitted the fraudulent claims from 2004 until the state closed the three nursing homes they operated in 2007. The two pleaded not guilty to the charges.  U.S. Attorney Sally Quillian Yates said the married couple used the money "to buy cars and real estate while their nursing home residents went without basic necessities, such as food and medicines." She said the services that did trickle down to the elderly were "so far below Medicare and Medicaid standards that they were worthless and harmful."

The Housers managed two nursing homes in Rome and a third one in Brunswick that housed about 300 elderly residents altogether. Prosecutors say they started pilfering the money in 2004, around the same time they began having problems meeting their payroll.

They failed to repair washing machines, a balky air conditioner and a leaking roof. Pantry stocks were so low that some employees spent their own money — even as their paychecks were bouncing — to buy the residents milk, bread and other staples.  Much of the nursing staff resigned because the Housers were writing bad paychecks. The Housers hired a check-cashing service to cash the employees' paychecks, and in December 2006 prosecutors say George Houser wrote the service a bad check for $120,000.

All the while, prosecutors say, the Housers were using the company's account as their personal piggy bank.  The couple bought a Mercedes-Benz with some of the funds and Rhonda Houser received at least $100,000 in checks or transfers from the account for her personal use. About $1.3 million from the account also went to buy George Houser's ex-wife a home in Atlanta.

George Houser, 62, is charged separately with failing to pay his employees' payroll taxes to the IRS and failing to file personal income tax returns.

"Pure greed being placed above the well-being of our most vulnerable citizens will not be tolerated," said Derrick Jackson of the U.S. Department of Health and Human Services.
 

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The Sacramento Bee had two articles here and here about the jury's verdict against Colonial Healthcare and its parent company, Horizon West of Rocklin.  The jury found that the nursing home committed elder abuse in the death of a woman in 2005.  After deliberating fewer than two days, the jurors unanimously agreed that Defendants were responsible for the death of Frances Tanner.

They awarded $1.1 million in damages for Tanner's pain and suffering and for her daughter Elizabeth Pao's loss of companionship. They also decided that the home's conduct was "malicious, oppressive or fraudulent," therefore punitive damages may be awarded also.  The jury will hear further testimony about the corporation's finances before deciding on punitive damages.

Tanner was 79 years old, spirited and mobile but suffering from mild dementia, when she moved into the home in March 2005. Seven months later, after a preventable fall caused by neglect that resulted in a broken hip, she was dead from an infected bedsore.  Jurors heard evidence of chronic understaffing, poor medical documentation and corporate greed. One former Colonial staffer said he would not place a relative at the home.  Colonial and Horizon put profits before good patient care.

Colonial, which recently changed its name to Hilltop Manor, has a history of problems with state regulators. The Tanner case was the fourth in recent years in which the home was cited in the death of an elderly patient.

"We have a corporate culture here that is callously indifferent to human life," Sacramento attorney Ed Dudensing said in closing arguments this week.  "They value money but not patient care."

Colonial "recklessly failed Frances Tanner in every way conceivable," Dudensing said, including allowing her to endure a fractured hip, keeping poor notes on her care and missing the skin condition that killed her.

One advocate, Carole Herman of Foundation Aiding the Elderly, said lack of proper staffing may be the most critical issue facing nursing home patients and their families.

Here and here are two article reporting the $28 million puntive award verdict.   "The jurors obviously felt that this is what they needed to do to send the message, to attempt to deter future bad conduct," Dudensing said. 

They decided on punitive damages after hearing evidence about the corporation's finances.  Horizon West is worth about $200 million. He suggested $10 million would be an appropriate punitive award for the chronic understaffing and inadequate care that he said led to Tanner's death.

Read more: http://www.sacbee.com/2010/05/14/2749834/nursing-home-ordered-to-pay-28.html#ixzz0nubuVtAc
 

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The Fresno Bee reported a class action lawsuit regarding short staffing at Valley Nursing Home.  The lawsuit claims the obvious--that a group of for-profit nursing homes have put elderly residents at risk and skirted state law by skimping on staff to make more money.  Nursing home residents say staffing problems have plagued homes operated by Skilled Healthcare Group Inc., the 10th-largest nursing home chain in the country.  More than 32,000 nursing home residents are represented by the class action.  They hope to improve care.

Industry and advocates for nursing-home reform are watching the case closely. It's not the first class-action case nursing homes have faced for staffing problems, but the size of the case means it could have a far-ranging effect on how nursing homes are staffed.

Millions of dollars could be at stake. In addition to seeking punitive damages, the plaintiffs are suing for statutory damages for each day the nursing homes are found out of compliance with staffing laws. The plaintiffs contend the California homes were under-staffed thousands of days over the six-year period -- 2003 to 2009 -- covered by the lawsuit. Penalties can be up to $500 per resident for each day the law was violated.

Lawyers for the nursing-home residents say they hope not only to win restitution for residents, but also to spur reforms in the industry. "We want to change the corporate culture of the for-profit nursing operators to have them start paying more attention to the nursing of the residents and less attention to shareholders," said Michael Crowley, lead trial counsel for the plaintiffs.

Skilled Healthcare Group of Foothill Ranch was the nation's 10th-largest nursing home chain in 2009, based on the number of nursing beds, according to the trade journal Provider Magazine.

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The San Francisco Chronicle ran a disturbing article about Concepcion "Connie" Pinco Giron.  She was an administrator at a Berkeley nursing home charged with kidnapping Carnell Williams, an 85-year-old woman with Alzheimer's disease. 

Giron told a supervisor that Williams was being transferred to another care home. There were no such plans, however - instead, Williams moved into Giron's home and Giron started cashing Williams' pension and Social Security checks.  The victim was held for a year in the home of the administrator.  She stole more than $50,000 if you  five other elderly patients.  Giron opened bank accounts at Citibank for five other patients in 2008 and began transferring money from those accounts into her own bank account.

Giron wrote checks to herself from the patients' accounts, used their ATM cards, and stole cash from patients' trust accounts that the Berkeley nursing home maintained.

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