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

Numerous websites and news organizations have written about the recent settlement between the DOJ and Murray Forman, Rubin Schron, and Leonard Grunstein, owners and operators of hundreds of nursing homes through various entities such as Mariner, Sava Senior Care and Fundamental Long Term Care Holdings.  See articles and press releases here, here, here, here, here, here, here, here, here, here, here, and here.

What is incredible and disappointing about the settlement is the DOJ only made these criminals  pay $14 million but did not make them testify, admit guilt, payback the kickback, or take away their ability to continue owning and operating nursing homes.  What kind of penalty is $14 million when they have stolen millions more from Medicare and Medicaid?  Why did the DOJ make the now defunct Mariner pay but not their successor Sava Senior Care?   Why did they allow the Complaint to be dismissed before the settlement?  Why did they allow Forman and Grunstein, the masterminds behind the illegal scheme deny any responsibility or wrongdoing?  Why didn't they make Forman and Grunstein pay the kickback back to Medicaid and Medicare?

The settlement resolves the United States’ allegations that the defendants solicited and received kickback payments from Omnicare, Inc. (“Omnicare”), the nation’s largest pharmacy that specializes in dispensing drugs to nursing home patients.  

"As outlined in the government's complaint, Rubin Schron, Leonard Grunstein and Murray Forman tried to disguise an unlawful kickback payment," said Mary Louise Cohen, a Washington, DC, attorney with Phillips & Cohen LLP, which represents the whistle-blower. "Omnicare's $50 million payment for a small unit of Mariner Health Care -- which had less than $3 million in assets and only two employees -- just didn't add up without figuring out what else Omnicare was getting as part of the deal."

In a Complaint filed in March 2009 and unsealed in November 2009, the United States alleged that Omnicare, Mariner, Sava, Grunstein, Forman, and Schron conspired to arrange for Omnicare to pay $50 million in exchange for agreements by Mariner and Sava to use Omnicare’s pharmacy services for 15 years.   In 2004, Grunstein and Forman proposed that Schron provide financial backing for the acquisition of Mariner, which at that time was one of Omnicare’s largest customers. Grunstein and Forman attempted to arrange the Mariner acquisition so that Schron would have to contribute as little cash as possible. To achieve this end, Grunstein and Forman pursued a plan to sell to Omnicare the right to continue providing pharmacy services to Mariner, even though Forman was warned by lawyers that selling the right to provide pharmacy services would constitute an illegal kickback.

Grunstein and Forman thereafter arranged for Omnicare to pay them $50 million to purchase a  Mariner company that had only two employees and no tangible assets.  Omnicare paid $40 million of this amount up front, prior to actually acquiring the Mariner business unit, and simultaneously obtained new 15-year pharmacy contracts from Mariner and from Sava, a new nursing home chain that Grunstein and Forman created from Mariner. Grunstein and Forman illegally tied the new pharmacy contracts to Omnicare’s agreement to purchase the small Mariner business unit, and that the total $50 million purchase price for the business unit actually was a kickback by Omnicare to keep the future business of Mariner and Sava. In 2006, after the Government issued subpoenas concerning the transaction, the individual defendants created backdated documents in a further attempt to hide the kickback.

In November 2009, the United States and Omnicare entered into a $98 million settlement agreement that resolved Omnicare’s civil liability under the False Claims Act for paying kickbacks to keep the Mariner and Sava business.  So Forman and Grunstein coerced OmniCare to pay them a $50 million kickback and Omni had to pay $98 million but Forman and Grunstein and their companies only had to pay $14 million!?!

As part of the settlement, Mariner has entered into a corporate integrity agreement. This agreement provides for Mariner to put in place procedures and reviews to avoid and promptly detect conduct similar to that which gave rise to this matter. At the same time, OIG-HHS has reserved its rights to seek exclusions of Sava, Grunstein, Forman, and/or Schron from participation in Medicare, Medicaid, and all other Federal health care programs.

"I suspect that if you got [Grunstein, Schron and Forman] all in a room and asked them whose fault this was, they'd all be pointing at someone else," says one person familiar with the case. "And that's really what this transaction was about --setting up all these different entities and shells and moving pieces so that nobody had responsibility."

Rubin Schron, a New York real estate investor who along with National Senior Care Inc., bought Mariner Health Care Inc., which is at the center of the kickback scheme. -- Leonard Grunstein, a New York real estate attorney who was a partner with the law firm, Troutman Sanders. He was Schron's agent in the purchase of Mariner Health Care Inc. and in the alleged kickback scheme. -- Murray Forman, an associate of Grunstein's and Schron's who also is president of a Long Island school board. -- Mariner Health Care Inc., a Delaware corporation with headquarters in Atlanta, Georgia, that operates nursing homes and, according to the government's complaint in this case, is controlled by Schron. -- SavaSeniorCare Administrative Services LLC, a privately held Delaware company with headquarters in Atlanta, Georgia, also reportedly controlled by Schron. Sava affiliates lease and operate nursing homes.

This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion

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Visiting Physicians Association will pay $9.5 million to settle for submitting false claims to Medicare, Medicaid and the military TRICARE medical program.  The doctors' group submitted false claims for unnecessary home visits, tests and procedures, as well as services that were never provided.   The claims were for people with Medicare, Medicaid and the military TRICARE insurance programs.   The settlement resolves four lawsuits filed by private plaintiffs under provisions of the False Claims Act, which permit private parties to file an action on the government’s behalf and share in any recovery. This settlement provides that the four whistle-blower plaintiffs will collectively receive a total of approximately $1.7 million.

Visiting Physicians Association, which has provided home health services in Michigan, Ohio, Georgia and Wisconsin, will make the payments to the U.S. government and the state of Michigan, to settle the allegations that it submitted claims for unnecessary home visits, unnecessary tests and procedures and other services it never provided.

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The Herald-Review.com had an article about Certified Health Care Management Inc (which was the company that once managed Prairie View Care Center nursing home) and Dr. Carl Johnson.  They recently agreed to settle a lawsuit filed after a resident of the home died because of injuries he received there. The $700,000 settlement went to the estate of Donald McCormick Jr., who was only 43 years old when he died Nov. 24, 2002.   According to Levin & Perconti, the Chicago law firm that filed the lawsuit, McCormick was admitted to Prairie View on March 19, 2002. The firm said he suffered impairments and was dependent on nursing home staff for all activities of daily living.

McCormick's impairments also made him unable to communicate his needs to nursing home staff, and from his admission until his discharge on May 12, 2002, he became severely malnourished, dehydrated and developed a massive bed sore.  The wound became so bad that it exposed a bone, and the injuries were caused by the nursing home and a doctor's failure to provide adequate medical and personal care, leading to his death.

Case documents indicated that Certified Health Care Management agreed to pay $600,000 to McCormick's estate, and Johnson agreed to pay $100,000. The lawsuit was filed in Cook County because that's where the nursing home's management company is located.

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The Associated Press had an article about the settlement between the lame duck Bush Administration Department of Justice and C.M. Tucker, Jr. Nursing Care Center run by the State of South Carolina.  There is also one in the Free Times.  If you recall, the Free Times ran the article titled Death at C. M. Tucker almost a year ago and has followed the investigation from the start.  Here are some of the facts of the settlement.

A South Carolina agency and the federal government have reached a settlement eight months after the Justice Department accused a state-run nursing home of providing inadequate care to residents.  Many of  which led to injuries and death.  The settlement was a compromise, and an ugly deal made between Bush outgoing DOJ and SC. The settlement avoids litigation (and avoids further scrutiny and embarassment).   The settlement requires the nursing home to start programs for  training, monitoring, reporting, and evaluation requirements. It requires staff to pay close attention to patients’ weight, food intake, pressure sores and pain management, and all deaths must be reported to the federal agency.  (All of these things should have been done before).

The agreement follows a scathing, detailed report issued by the Justice Department.  This facility is home to 360 residents, including 70 veterans, in three buildings. Many of have severe physical or mental impairment.  The investigation was conducted in fall 2006 under the Civil Rights of Institutionalized Persons Act. Most Tucker residents' care was paid by Medicaid. The May report called the facility a “nursing home of last resort for hundreds of patients with long-term psychiatric illnesses.”

Among the findings, it accused caregivers of not identifying or addressing patients’ swallowing disorders. In one example, it said a 59-year-old man died four weeks after being diagnosed with a lung infection caused by inhaling food or liquid. The report said swallowing problems may have contributed, as the man lost 20 percent of his body weight over four months because he was unable to chew and ingest safely.  Other issues include not regularly turning and repositioning patients to avoid bed sores, not giving dying patients enough pain medication, improper nutrition, not doing enough to prevent falls that cause injury, inadequately investigating accusations of abuse, and unsanitary conditions.

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Chicago's Daily Herald had an article about a million dollar settlement between a nursing home and the family of a resident who died after repeatedly falling at the nursing home in Libertyville.  The case, prompted by the 2005 death of 83-year-old Helen Menneke at Winchester House, was settled out of court after mediation.   Attorney Susan Novosad called the figure the largest nursing home negligence settlement in county history.

Menneke, formerly of Mundelein, was admitted to Winchester House in January 2004, suffering from dementia, Novosad said.   She fell several times over the course of the year, suffering a brain injury and broken bones, Novosad said.   Injuries from a final fall in December 2004 required surgery, and Menneke died in January 2005.

After Menneke's death, Winchester House instituted new policies requiring staff to more frequently check patients' wheelchair and bed alarms to ensure they're working properly, Novosad said.

"The family was outraged that this happened to their relative," Novosad said. "(They) didn't want this to happen to anybody else."
 

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A $750,000 settlement between a Pennsylvania nursing home and Francis X. Ounan has been approved by a federal judge. Ounan filed suit against nursing home chain Sunrise Senior Living Services, Inc. on January 15, seeking damages for claims of negligence and wrongful death.

Ounan's mother, Margaret Ounan Boyle, died in November of 2005 from injuries she sustained while wandering from the nursing home. The day after her admission, Boyle fell while wandering from the nursing home, sustaining head injuries. She was found with police assistance and taken to the hospital, where she was diagnosed with bleeding of the brain and died the next morning.

Ounan claims that the nursing home knew at the time of his mother's admission that her Alzheimer's made her a high-risk for wandering. Ounan claims that the nursing home was grossly negligent in failing to institute adequate measures to prevent its residents from wandering. Further, he claims, the nursing home failed to formulate a plan to address his mother's tendency to wander.

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A Cleveland, Tenn., nursing home company has settled a lawsuit for neglecting its patients and allowing an elderly woman to lie in her own feces for hours at a time after back surgery.

The woman, Betty Mae Hanzel of Hastings, developed an infection in her wound during her stay at the Life Care Center of Elkhorn that required surgery to reopen her incision and drain the infection and fecal matter in the wound.

Terms of the settlement between Hanzel and Life Care Centers of America of Cleveland, Tenn., were not disclosed.  According to the federal lawsuit, the nursing home staff allowed Hanzel to lie in her own feces and urine for extended periods and told Hanzel to get her own water even though she couldn't get out of bed.

Near the end of her stay at the home, Hanzel discovered a discharge from her surgical incision, but staff did not tell her doctor about the condition.  Later, she developed blood clots in the arteryleading to her lungs and a "super-infection of the bowel," which led to surgery to remove most of her colon. 

Nurses who used to work at the home in west Omaha said the facility was often short on nurses, and some evenings one registered nurse was responsible for 120 patients, according to depositions taken as part of the lawsuit.

Life Care Centers of America owns and manages more than 260 facilities in 28 states _ including retirement communities, assisted-living facilities and nursing homes.

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