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

St. Louis Today had an article about a criminal enterprise masquerading as a nursing home.  Luckily they got caught and the company pleaded guilty to fraud and will pay $1.6 million in fines and restitution.

When the Texas-based Cathedral Rock Corp. bought 11 Missouri and Illinois nursing homes in 2001, owner and CEO C. Kent Harrington told employees that residents were the first priority and would get "extra-special treatment."

The real priority was packing elderly and disabled clients into those homes — including five in the St. Louis area that were understaffed and provided substandard care, according to court documents and federal prosecutors.   Until 2005, the services "were grossly inadequate" and represented "a complete failure of care," Assistant U.S. Attorney Dorothy McMurtry said in court.

It also settled a whistle-blower civil lawsuit filed by nurses in 2003 that triggered what officials said was a relatively rare criminal prosecution of a nursing home over poor care.

Five Cathedral Rock-owned companies that ran those homes agreed to pay $1 million in criminal fines and penalties, and $628,000 in the civil settlement.  The companies will be formally sentenced in April, likely to some term of probation in addition to the fines and penalties.  So no one is going to jail for defrauding the government, stealing from medicare and medicaid, and directly causing the deaths of dozens of residents!

Among the claims was that the homes' staff doctored patient charts, falsified drug records and failed to give necessary medications. Some residents suffered from bed sores. Others wandered away. One ended up on a roof. One was found days later. One died after falling from a window.  The homes were repeatedly cited by regulators, fined and penalized.   Officials said the homes filed corrective plans but then failed to comply or "misrepresented" their efforts to comply.

"FTB (fill the beds) is everything," read a 2004 e-mail from a Cathedral Rock regional vice president to another executive. "Whereas compliance is important and cost control is as well, CENSUS is to be your primary focus," the e-mail read.

In 2004, Cathedral Rock had 2,600 beds in 25 nursing homes and assisted-living facilities in Missouri, Illinois, Texas, Ohio and South Carolina, Harrington said at the time.

Its website currently lists 1,308 beds in 15 homes in Texas and New Mexico. A spokesman said it no longer operates facilities in Missouri or Illinois.

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McKnight's had an article about a decision in Colorado regarding the enforcement of an arbitration clause in a nursing home case.  The Colorado court ruled that a healthcare proxy does not have the authority to sign an arbitration agreement on behalf of a nursing home resident.  Under Colorado law, a healthcare proxy is only empowered to make medical decisions on behalf of another, including “provision, withholding, or withdrawal of any health care, medical procedure, including artificially provided nourishment and hydration, surgery, cardiopulmonary resuscitation, or service to maintain, diagnose, treat, or provide for a patient's physical or mental health or personal care,” the Bureau of National Affairs reported.

In the case of Lujan v. Life Care Centers of America, Colorado, Alvin Lujan signed an arbitration agreement, waiving jury trial rights, when admitting his mother, Estella Lujan, to the Life Care Centers of America nursing home. She died three days later, and a wrongful death claim was filed against the facility. Life Care Centers argued that admission to a nursing home is a medical decision and, therefore, the Colorado law applies.  But the Colorado Court of Appeals determined that the signing of an arbitration agreement does not fall under the specific definition of the authorities given to a healthcare proxy. As a result, the Lujan family had the right to sue the facility.

In October, the Nebraska Supreme Court arrived at a similar decision regarding the roll of patient surrogates
 

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There have been several articles about the recent sale of nursing homes by CapitalSource.  The articles are unclear about which nursing homes will be sold.  Below are links and information from several articles.

McKnight's wrote that CapitalSource, commercial lending company to many nursing home chains, will sell off its long-term care interests to Omega Healthcare Investors in a deal valued $860 million.   The sale covers a CapitalSource lease portfolio that includes 143 long-term care facilities.  Under the deal, Omega Healthcare Investors, which already owns or holds mortgages for 254 skilled nursing and assisted living facilities, will assume $529 million in asset-related debt, and give CapitalSource $280 million cash and $51 million in OHI stock.   A second article from McKnight states that CapitalSource Inc.,sold the last of its nursing home interests. This marks the company's exit from the skilled nursing ownership business.  The latest sale takes CapitalSource out of nursing home ownership, but it says it will continue to provide financing for owners and operators of long-term-care facilities.

CapitalSource sold the 37 nursing homes to an undisclosed buyer for an all-cash price of $100 million, the company said in a statement. The money will be used to pay down debts associated with the properties. The sale is part of a wider sale of its net lease portfolio, including the already disclosed divestiture of 143 skilled nursing facilities to Omega Healthcare Investors, Inc. CapitalSource will continue to provide financing for owners and operators in the long-term care industry, according to a company spokesman.

This final sale, along with the Omega sale and a Department of Housing and Urban Development mortgage financing deal, should net CapitalSource $495 million. The company said it would use these revenues to reduce the balance on its syndicated bank facility and add to overall company liquidity. The additional liquidity should put the company in a position to expand its healthcare lending franchise, the CapitalSource release said.

The Washington Post had an article on the sale stating that CapitalSource needed help to relieve the debt acquired during the recession.  CapitalSource is a specialty financing companies that has been hit hard by the credit crisis and the recession. Auditors at Bethesda-based American Capital issued an opinion earlier this year that the firm was in danger of not continuing as a business.  The company has disappointed analysts this year because of higher-than-expected losses on its loans to businesses and commercial real estate developers.

CapitalSource, which makes loans from $10 million to $100 million to nursing homes, said selling its 180 nursing homes is part of its transition to a bank. The company earlier this year changed its status from a publicly traded real estate investment trust to a bank.  James Pieczynski, who runs CapitalSource's health-care lending business, and Steven Museles, the company's chief legal officer, will become co-chief executives.

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Macon.com posted an article about a proposal in Georgia to house sex offenders, violent offenders, those being electronically monitored and those with medical and mental health needs in nursing homes.   The state DOC is working with the state Board of Pardons and Paroles to recruit nursing homes, assisted-living facilities and other organizations interested in housing offenders upon release from prison.  Why would they be interested in bringing these dangerous people into the homes of our parents and grandparents?  The only reason is greed and reckless indifference to the safety of their other residents.

The statewide briefings are designed to serve as an "educational forum" for potential housing service providers, according to a Georgia Department of Corrections news release.  Briefings will be held across the state through February 2010. For more information about the meetings, contact LaTrese Schofield, residential coordinator for the state DOC, at schofl00@dcor.state.ga.us or (404) 463-2947.

Please contact Ms. Schofield and tell her this is a bad idea.

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NCCNHR (formerly the National Citizens' Coalition for Nursing Home Reform) is a 501(c)(3) nonprofit membership organization founded in 1975 by Elma L. Holder to protect the rights, safety and dignity of America's long-term care consumers.   NCCNHR issued the following Bulletin:

The health care reform bill passed by the House of Representativesbefore includes not only sweeping health insurance reforms but also nursing home transparency, criminal background checks on long-term care workers, and a voluntary payroll deduction system that would provide benefits for long-term care services. The bill, H.R. 3962, the Affordable Health Care for America Act, can be downloaded at http://thomas.loc.gov.

As expected, the bill includes-without amendment-nursing home transparency provisions requiring:

1)  Public disclosure of individuals and entities that own, govern, operate, finance, provide services to, and/or control the nation's nursing homes.

2)  Compliance and ethics programs and internal quality assurance programs in nursing homes, and pilot projects to test ways to improve oversight of chains.

3)  Collection and reporting of staffing information based on payroll data, including hours of care per resident day, turnover and retention rates, and facility expenditures for wages and benefits.

4)  A review of Nursing Home Compare and addition of information about sanctions against facilities and the number of adjudicated crimes occurring in them.

5)  A categorical breakdown of expenditures on cost reports to show how much facilities spend on direct care versus other expenses.

6)  An improved state complaint process to help protect complainants against retaliation.

7)  An increase in federal civil monetary penalties and a process to hold CMPs in escrow during appeals (although only after an independent informal dispute resolution process was completed).
8)  Adequate notification when facilities decided to close, including the option for the government to continue reimbursement until relocation was achieved.

9)  Training of nursing assistants in dementia care and abuse prevention.

10)  The bill would authorize a program of national criminal background checks on all long-term care workers who have access to residents or patients--from those who provide in-home long-term care services to nursing home employees.

H.R. 3962 also incorporates the Community Living Assistance Services and Supports (CLASS) Act to create a national voluntary social insurance system through which enrollees who became disabled (after paying into the system for at least five years) could purchase community-based long-term care, services or supports. Nursing home residents who were Medicaid beneficiaries could retain 5 percent of their benefit, in addition to their personal needs allowance, for their personal use while the remainder was applied to the cost of their care. (See page 1562 of the bill.)

Last-minute efforts to add the Elder Justice Act to H.R. 3962 were not successful. The EJA is in the health care reform bill passed by the Senate Finance Committee.

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A friend of mine who is interested in nursing homes sent me a link to Money-Driven Medicine: Patients for Sale.  I have not seen the movie but the trailer looks interesting.

Money-Driven Medicine provides the essential introduction Americans need to become knowledgeable participants in healthcare reform.   Based on Maggie Mahar's acclaimed book, Money Driven Medicine: The Real Reason Health Care Costs So Much, the film offers a behind-the-scenes look at how our 2.6 trillion dollar a year healthcare system went so terribly wrong and what it will take to fix it.

The U.S. spends twice as much per person on healthcare as the average developed nation, fully one-sixth of our GDP - yet our outcomes, especially for chronic diseases, are very often worse.  The U.S. is the only industrialized nation that has chosen to turn medicine into a largely unregulated, for-profit business. 

In Money-Driven Medicine, Dr. Donald Berwick, president of the Institute for Health Care Improvement, explains: “We get more care, but not better care.” Our fee-for-service system channels resources into the high-tech, high-cost “rescue care” patients need after they become critically ill, while it skimps on the preventive primary care which could keep them out of the hospital in the first place. As a consequence, emergency rooms overflow while family practitioners are becoming an endangered species. Medical students explain that these perverse pay incentives drive them away from primary care into higher-paying specialties.

Medical ethicist Larry Churchill doesn’t mince words: “The current medical care system is not designed to meet the health needs of the population. It is designed to protect the interests of insurance companies, pharmaceutical firms, and to a certain extent organized medicine. It is designed to turn a profit. It is designed to meet the needs of the people in power.”

These businesses comprise the “medical-industrial complex” which has wrested power from physicians, turning healthcare into a commodity and patients into profit centers.   Although many uninsured and underinsured Americans receive too little care, the well-insured often get unnecessary, even risky care. More than two decades of studies by researchers at Dartmouth reveal that one-third of our healthcare dollars are squandered on useless tests and ineffective or unproven procedures no better than the less-costly ones they replace. The studies demonstrate that evidence-based, accountable care would be both more effective and less expensive. 

In Money-Driven Medicine frustrated doctors and outraged patients testify to the tragedies which can happen when profit trumps patients’ needs. Money-Driven Medicine will encourage health professionals and patients to work together to take control of American medicine back from the MBAs.

 

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The George Washington University School of Public Health did a study about health insurance fraud.  Here are some interesting excerpts from the study:

In 2007, the U.S. spent nearly $2.3 trillion on health care and public and private insurers processed more than 4 billion health insurance claims.  The National Health Care Anti-Fraud Association (NHCAA) has estimated that, conservatively, 3% of all health care spending—or $68 billion—is lost to health care fraud. Other estimates by government and law enforcement agencies place fraud-related losses as high as 10% of annual health care spending; at this rate, the losses in 2007 alone –over $220 billion – would have been enough to cover the uninsured.

Medicare and Medicaid may be susceptible to fraud in part because many investigative reports on victims of consumer swindles suggest that financial fraud is not uniformly distributed across all households; instead, it disproportionately targets the elderly, women, minorities, the less educated, and the poor.  In other words, Medicare and Medicaid fraud may reflect the vulnerable nature of the populations that depend on the program rather than any failing on the part of either program.

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McKnight's had an article about health care spending.  The article states that Federal spending on nursing home and home health accelerated in 2007, even as overall healthcare spending grew at the slowest rate since 1998, according to a new spending report issued by the Centers for Medicare & Medicaid Services.

Freestanding nursing home spending expanded by 4.8% that year, compared with 4.0% in 2006. Meanwhile, spending for freestanding home healthcare services increased to 11.3%.   Overall healthcare spending climbed by 6.1% in 2007 to $2.2 trillion, or $7,421 per person. Total healthcare spending by public programs, such as Medicare and Medicaid, grew 6.4% in 2007, a deceleration from 8.2% 2006.

One of the factors contributing to the overall slower growth in federal healthcare spending was a deceleration in prescription drug spending due to an increased use of generic medication. Retail prescription drug spending grew by 4.9% in 2007, compared with 8.6% growth in 2006, according to the report.

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