Nursing home operators' self-dealings criticized in national report

It's no secret that nursing homes outsource a wide variety of goods and services — often management, facilities maintenance, staffing and so forth — to companies in which they have a financial interest or even a controlling stake.

But a new, highly critical analysis finds that nearly three-quarters of U.S. nursing homes are involved in “related party transactions,” often funneling money to sister companies while claiming to be cash-strapped to worried employees and patients.

A Kaiser Health News review of federal inspection and quality records shows nursing homes that outsource to related organizations often have fewer nurses and aides per patient, higher patient injury rates and almost twice the number of complaints as independent facilities.

Behind the scenes, the related owners can create lucrative contracts with facilities for their services and record those higher profits away from  nursing home accounts, Kaiser reported.

“Almost every single one of these chains is doing the same thing,” said Charlene Harrington, a professor emeritus of the School of Nursing at the University of California-San Francisco. “They're just pulling money away from staffing.”

In 2015, nursing homes paid related companies 10% of their spending, according to Medicare disclosures reviewed by Kaiser. Companies argue that related transactions create efficiencies and cut tax burdens, and they are perfectly legal.

One chain whose partnerships were examined in court after a pressure-ulcer related lawsuit revealed its owners turned a 28% profit over eight years — while nurses at the buildings they owned testified about chronic supply shortages.

A financial consultant told Kaiser that typical nursing home profits are “in the 3 to 4 percent range.”

Now, Kaiser reported, the larger margins enjoyed by related companies are being scrutinized by lawyers, unions representing healthcare workers and even California's state auditors.

Full Article & Source:
Nursing home operators' self-dealings criticized in national report

Guardian blames nursing home operators for resident's injuries

CHARLESTON — An East Bank woman is suing nursing home operators, alleging their negligence brought about injuries to a resident.

Ester Bell, full guardian of Hobart Stafford, filed a complaint Feb. 7 in Kanawha Circuit Court against Golden Living Center-Glasgow, Beverly Enterprises Inc., et al, alleging they breached their mandated statutory duty to provide Stafford with his nursing home resident's rights.

According to the complaint, during different times and at different locations, Stafford was a resident at the defendants' facilities. As a result of the defendants' negligence, the suit says, Stafford suffered serious injuries resulting in pain and suffering, mental anguish and medical expenses.

The plaintiff alleges the defendants failed to provide a safe environment, adequate supervision and safety devices to prevent Stafford from injuring himself and failed to provide health care services in compliance with states laws and regulations and acceptable professional standards.

Bell seeks trial by jury, compensation for all damages, litigation costs and all other relief the court sees fit to award. She is represented by Andrew L. Paternostro, Jeff D. Stewart and Shayla M. Rigsby of The Bell Law Firm in Charleston.

Kanawha Circuit Court Case number 17-c-188

Full Article & Source:
Guardian blames nursing home operators for resident's injuries

Nursing Home Operators Face Over $115M For Medicare Fraud

By John Kennedy

Law360, New York (February 16, 2017, 10:12 PM EST) -- A Florida federal jury on Wednesday found the operators of 53 skilled nursing facilities liable for more than $115 million in damages stemming from false claims they submitted to Medicare and Medicaid after pretending patients needed and received more care than they did.

The jury ruled on False Claims Act allegations brought by whistleblower Angela Ruckh, who worked at two of the facilities as a nurse, and found that the four defendants — CMC II LLC, Salus Rehabilitation LLC, 207 Marshall Drive Operations LLC and 803 Oak Street Operations LLC — had made varying amounts of false claims, backed up by fraudulent records, to Medicare and Medicaid.

Because the False Claims Act calls for treble damages plus an additional penalty of between $10,000 and $22,000 for each false claim, the defendants will likely have to pay in excess of $345 million, according to Mary Inman and Poppy Alexander of Constantine Cannon LLP, who have been watching the case.

The most affected defendant was CMC II, as successor to Sea Crest Health Care Management, doing business as LaVie Management Services of Florida, which submitted 123 false Medicare claims using more than 130 false statements and should be held liable for $109.8 million in damages, the jury said.

Oak Street, which was doing business as Governor’s Creek Health and Rehabilitation Center, submitted four false claims, backed up by about 50 false records, and is liable for $3.3 million in damages. Marshall Drive, which was doing business as Marshall Health and Rehabilitation Center, followed closely with one false claim backed up by about two dozen false records and should be liable for $2 million in damages, the jury said.

Salus, which was doing business as LaVie Rehab, submitted 44 false claims backed up by an equal number of fraudulent records, but shouldn’t pay anything, the jury said. It wasn't immediately clear why.

The judgment is one of the largest False Claims Act jury verdicts in a while, Alexander said, as Inman noted that such cases, given the punitive nature of the FCA and the pressure it puts on defendants to settle, don’t go to trial often.

“This is what happens when defendants roll the dice and take a case to trial,” Inman, a partner in Constantine’s whistleblower practice, told Law360 Thursday. “They face being hit with treble damages as well as penalties.”

Alexander, an associate in Constantine’s whistleblower practice, said that the case is one of the larger FCA cases dealing with skilled nursing facilities to go to trial. Medicare dollars are increasingly finding their way to skilled nursing facilities, which also makes them a target for fraud, she said.

In the instant case, the defendants were artificially increasing the amount of resources they claimed their patients needed in order to get more money from the federal health care programs. This type of fraud has been repeatedly listed as a top area of concern by the U.S. Department of Health and Human Services’ Office of Inspector General, Inman said.

She added that any skilled nursing provider that sees this verdict should take a look at its own Resource Utilization Group assessment policies and ensure that it’s in compliance with the law and not upcoding.

The verdict could also affect how other courts interpret this type of RUG fraud and how RUG standards are supposed to be interpreted, as well as the use of statistical sampling to determine liability, which was an issue in this case, Alexander said.

Neither party could be reached for comment Thursday.

Ruckh is represented by The Cohen Law Group, Kellogg Huber Hansen Todd Evans & Figel PLLC and Delaney Kester LLP.

The companies are represented by Terence J. Lynam and Robert S. Salcido of Akin Gump Strauss Hauer & Feld LLP and Tina Dunsford of the Florida Health Law Center.

The case is U.S. ex rel. Ruckh v. CMC II LLC et al, case number 8:11-cv-01303, in the U.S. District Court for the Middle District of Florida.

--Additional reporting by Alex Wolf. Editing by Bruce Goldman.

Full Article & Source:
Nursing Home Operators Face Over $115M For Medicare Fraud