Brookdale to implement reforms, pay $1.9 million in attorney’s fees to settle staffing algorithm lawsuit

By Kimberly Bonvissuto

Brookdale Senior Living will be required to adopt corporate governance reforms and pay $1.9 million in attorneys’ fees and expenses under the terms of a settlement to a lawsuit over the company’s staffing algorithm.

Judge Aleta A. Trauger of the US District Court for the Middle District of Tennessee approved the settlement, filing her order and final judgment July 9. 

A Brookdale spokesperson told McKnight’s Senior Living that the company was “pleased with the settlement.” 

“Resolving this matter allows Brookdale to further focus on providing quality care and services to its residents,” the spokesperson said.

Patricia Templin, a Brookdale shareholder, had filed the lawsuit in 2021, alleging that current and former Brookdale board members and executive officers breached their fiduciary duties by relying on a staffing algorithm to determine community staffing levels at the corporate level, which she said led to chronic understaffing at individual communities.

This so-called “intentional understaffing,” the lawsuit asserted, led to communities breaching their residency agreements, causing residents harm by misrepresenting the levels of care advertised, promised and provided to residents. In addition, the suit alleged that executives were paid “excessive and unwarranted” compensation, bonuses and termination payments and were “unjustly enriched.”

Brookdale denied the claims contained in the lawsuit, saying the company board members and executives acted “in good faith” and in the best interests of the company and its shareholders.  The company said in court documents that it agreed to the settlement to eliminate the “uncertainty, distraction, disruption, burden and expense” of further litigation. Both sides said the settlement is in the best interests of Brookdale and its shareholders.

Court documents did not specify the reforms that Brookdale will make.

Another case on hold

An appeal in another staffing algorithm case involving Brookdale, from 2020, was paused late last month after a tentative settlement was announced in the Templin case. The 6th US Circuit Court of Appeals granted a request from shareholder Brian Davis and Brookdale to put those proceedings on ice while the Templin case played out. 

Davis alleged misconduct by company executives trying to meet financial targets and said those actions were causing the company to intentionally underestimate data used for staffing algorithms.

A federal judge had ruled in January 2024 that the lawsuit could not move forward because the investors had not approached the board before filing it, and the judge had said that the the plaintiffs failed to show that going to the board would have been futile because of material benefits to the Brookdale directors in a proxy statement at the center of the lawsuit’s claims.

The plaintiffs appealed in February 2024, but both sides in the Davis case indicated that they anticipated filing motions to dismiss the appeal as moot if the Templin settlement was approved. 

Other criticism, lawsuits targeted staffing

Brookdale has faced other criticism and legal action in recent years based on allegations related to service quality and company representation of services to the public.

In spring 2024, The Washington Post delved into a staffing algorithm used by the company, alleging that the system underestimated the number of staff members needed to meet residents’ needs. The article was part of the Post’s Memory Inc. series, begun in December 2023 with a focus on elopements in assisted living.

Brookdale said it disagreed with the characterization of the program in the Post story, saying that the company had created the staffing algorithm “as a way to identify best practices to meet the needs of residents” and that it did not dictate staffing maximums or determine care costs.

The April 2024 Washington Post article came after the company faced a lawsuit related to staffing levels. In 2023, a federal judge denied class action certification for some claims in a 2017 California staffing lawsuit, Stiner vs. Brookdale Senior Living,  because the plaintiffs could not show that the communities were similarly staffed, according to The Post.

But last summer a federal judge granted a motion to certify three community-based subclasses in the 2017 case, in which current and former residents of Brookdale’s California assisted living communities sued the company, alleging elder financial abuse and widespread violations of the Americans with Disabilities Act. The complaint alleged that understaffing prevented residents’ activities of daily living needs from being met.   

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Brookdale to implement reforms, pay $1.9 million in attorney’s fees to settle staffing algorithm lawsuit 

Nursing home deaths: NJ lawmakers approve reforms but not investigation

by Michael Symons

TRENTON — Nine bills that would affect long-term care facilities in New Jersey, which are connected to half of the confirmed COVID-19 deaths in the state, were approved Thursday by the Senate or Assembly, including four now on Gov. Phil Murphy’s desk.

They include a state emergency operations center, raises for certified nursing assistants and staffing requirements and a task force to consider future changes. The bills derived from an investigation the Murphy administration commissioned that was done by Manatt Health.

State Sen. Joseph Vitale, D-Middlesex, said the legislation is needed to ensure long-term care facilities are better prepared for outbreaks – an upgrade that officials thought they had directed through laws put in place after a 2018 viral outbreak at the Wanaque Center for Nursing and Rehabilitation.

“Clearly somewhere along the line, there is failure. And I believe that needlessly, more people died than needed to during this pandemic,” Vitale said.

Vitale said clearly some nursing home residents would have died due to COVID-19 regardless – but that the toll in nursing homes now exceeding 7,070 clearly deserves a response.

“The amount that passed in our long-term care facilities and nursing homes and in our veterans’ homes in my view is unacceptable. And there ought to be accountability,” he said.

State Sen. Joseph Pennacchio, R-Morris, said the Legislature should further investigate why so many died from coronavirus in New Jersey nursing homes and that the U.S. Department of Justice is now asking similar questions.

“Moments of silence is great, but we can honor those that died by having a special select committee with subpoena powers,” Pennacchio said.

Democrats blocked a vote on his attempt to force the Senate to take up such a bill.

Assemblywoman Valerie Vainieri Huttle, D-Bergen, said New Jersey was the coronavirus epicenter in the United States in the spring and that long-term care facilities bore the brunt.

“COVID-19 truly has exposed the gaping holes in our state’s long-term care infrastructure, and this legislation is a critical component in filling in those cracks.”

Most of the bills advanced with widespread support. The biggest exception was one paying certified nursing assistants $3 more an hour, which Assemblyman Brian Bergen, R-Morris, said will lead to a shortage of home health aides.

It also requires facilities to spend 90% of their funds on direct patient care.

“The experts have said it’s mathematically impossible to do it,” Bergen said. “So not only is it not possible, ladies and gentlemen, but it’s not right. This is a government overreach into private business.”

Only about one-third of the package of bills made it to Murphy Thursday. Another third passed the Senate but not the Assembly, and the other third is still stuck in committees.

The following bills were approved and sent to Murphy:

• S2758/A4482: Establish minimum wage requirements for certain long-term care facility staff, establish a direct care ratio requirement for nursing homes and require DHS to conduct a nursing home care rate study.
• S2787/A4481: Establish New Jersey Task Force on Long-Term Care Quality and Safety, which would develop recommendations to drive improvements in person-centered care, resident and staff safety, quality of care and services, workforce engagement and sustainability and any other appropriate aspects of the long-term system of care in New Jersey.
• S2790/A4476: Establish certain requirements concerning the state’s preparedness and response to infectious disease outbreaks, epidemics, and pandemics affecting long-term care facilities. The bill would establish the Long-Term Care Emergency Operations Center in the Department of Health, which would serve as the centralized command for long-term care facility response efforts and communications during declared public health emergencies.
• S2813/A4547: Establish a temporary rate adjustment for nursing facilities to support wage increases and to cover costs related to COVID-19 preparedness. The bill would make a one-time appropriation of $62.3 million from the General Fund to the Department of Human Services for the purpose of implementing the bill.

The Senate also passed the following bills:

• S537:Establish certain minimum and maximum temperatures in emergency shelters, rooming and boarding houses, and certain nursing homes and residential health care facilities.
• S2785: Require long-term care facilities to adopt and implement written policies, provide for the practical availability of technology to facility residents and ensure that appropriate staff and other capabilities are in place, to prevent the social isolation of facility residents.
• S2786: Allow per diem health care workers working within long-term care facilities to accrue paid sick leave.
• S2788: Provide supplemental payments to long-term care facility staff providing direct care services during COVID-19 pandemic.
• S2798: Establish uniform requirements on the submission of outbreak response plans to DOH by long-term care facilities.

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Nursing home deaths: NJ lawmakers approve reforms but not investigation

Editorial: Who guards the guardians?

BY ALBUQUERQUE JOURNAL EDITORIAL BOARD

Sunday, July 5th, 2020 at 12:02am

Much has changed for the better since the Journal published an investigative series in November and December of 2017 titled “Who Guards the Guardians.”

Those stories by reporter Diane Dimond detailed complaints about a secretive system. Critics, most often family members of incapacitated people, complained about having little recourse to abuses that ranged from overspending and mishandling of assets to virtual carte blanche authority by court-appointed guardians and conservators to ignore and override the wishes of families when it came to concerns for their loved ones.

Despite heated denials by many within the system that anything was wrong, Journal Investigative Reporter Colleen Heild continued to probe complaints of abuse and misconduct. Meanwhile, the state Supreme Court took notice and along with other reforms established a process that has led to more transparency and created an avenue in which family members and others can petition the courts to address their grievances.

Justices Charles Daniels, who passed away in 2019 after retiring from the court, and Judith Nakamura were instrumental in advancing reforms. So were retired District Judge Wendy York of Albuqueque, who headed a Supreme Court-appointed commission to study the issue, and District Judge Shannon Bacon of Albuquerque, who is now a Supreme Court justice.

So it was fitting that Bacon announced last week that the New Mexico State Auditor’s Office will now have a permanent watchdog function over the nearly 6,000 cases in which state district courts have appointed guardians and conservators to manage the affairs of those deemed incapacitated.

The announcement followed a one-year pilot project undertaken by State Auditor Brian Colón, whose auditors found 194 “risk factors” in annual reports filed among more than 300 conservator cases sampled. The factors included lack of supporting documentation, conflicting information, and the fact that assets of the protected person being were understated or unaccounted for. Auditors also found instances of checks written directly to conservators. Or conservators charging large fees for services or reimbursements of expenses. The auditors sent more than 40 letters to judges in the cases laying out the concerns.

This kind of outside oversight is unprecedented.

With a green light from the judiciary, Colón’s office will now have oversight and involvement in what had traditionally been a closed system that sometimes excluded even family members of the incapacitated person. Colón appeared with Bacon on a Zoom video conference to make the announcement.

“We have an opportunity to step up oversight …” Colón said. “We’ve got to fill in the cracks (in the system) so we know those most vulnerable don’t fall through.”

Bacon said the courts and Legislature have already added more transparency to the system and enhanced reporting requirements. Now, she said, the courts plan to implement measures “to give auditors open access to guardianship and conservatorship cases.” Bacon said the auditors have been granted special access to online reports that typically aren’t public.

On the issue of reporting, though, Colón’s auditors recommended guardians and conservators provide supporting documentation instead of simply listing the amounts of assets and expenditures on standardized forms filed with the district courts.

The Supreme Court can make that happen by adopting a rule requiring it.

The auditor’s report also recommended “increased focus on review of financial affairs of protected persons with substantial assets.” That makes sense.

The state auditor also said the recent criminal sentences of two of four defendants in the now-defunct Ayudando Guardians Inc. underscored the need for more oversight in New Mexico. The company’s top officials stole millions of dollars from clients to finance a lavish lifestyle in a nearly decade-long scheme.

In contrast with a closed system that appeared to stonewall complaints, Bacon and Colón urged people with concerns to fill out a grievance form found on the state Supreme Court website. The forms are to be submitted to the district court where the case is filed. Colón said a copy also can be sent to his office.

In another major step forward, Bacon said the judiciary wants Colón’s office to be able to do random audits and go to banking institutions to review records, if needed. The details are still to be worked out with the courts.

“This ongoing process and partnership,” Bacon said, “is how we increase the sunshine and avoid the abuses of the past.”

The judiciary, lawmakers and the auditor all deserve credit for the work they’ve done. Now is the time to push ahead on the rest of the reform items to prevent the exploitation of incapacitated New Mexicans and give a voice to their loved ones.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.

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Editorial: Who guards the guardians?

New guardianship law offers more protections

By Colleen Heild

As New Mexico enacted adult guardianship reforms aimed at transparency and accountability last summer, the owner of an Albuquerque fiduciary company allegedly began skimming money from the very people the new law was supposed to protect.

But the new guardianship law that took effect last July 1 actually helped uncover the alleged embezzlement scheme and enabled the courts to alert the state Attorney General’s Office, which launched an investigation of Guardian Angels Representative Payee Services, said state Supreme Court Justice Shannon Bacon.

A state grand jury indicted the company’s CEO, Pamela Crumpler, on criminal charges last month.

Before last year’s reforms, “If I saw a problem, there was no path (in the law) that would really allow me to report that to law enforcement,” said Bacon, a former state district judge in Albuquerque.

Now the system is “no longer so sequestered that judges can’t report problems to law enforcement.” she said in a recent interview. “Now it’s a much easier path.”

Less than a year old, the new guardianship law is having “great effect,” Bacon told legislators recently.

On Wednesday, Gov. Michelle Lujan Grisham signed Senate Bill 395 to further bolster the reforms.

During a news conference Friday at the Roundhouse, Lujan Grisham said, “I wish we’d done a little more on guardianships.”

But SB 395 contains many reforms, including requiring certification and training of professional guardians and conservators and setting up of a standardized grievance process for complaints about the treatment or welfare of incapacitated people living under court-imposed guardianship or conservatorship.

The new measures were recommended by a steering committee of legislators, judges and the executive branch.

“This is the next logical step in the guardianship and conservatorship reform statewide,” Bacon said.

The judiciary still can’t say how many incapacitated people, who need someone to manage their affairs, are currently under guardianship or conservatorship. District courts around the state are still sifting through their case files to weed out those in which the protected person has died, moved or no longer needs court protection.

Also working under the legislation passed last year, the State Auditor’s Office is examining annual reports that guardians and conservators file with the courts on the status of a protected person, and few red flags have pointed to exploitation or mismanagement, Bacon said.

But there has been “underreporting of income and then there have been problems with how folks have been reporting,” Bacon said.

Beginning with an investigative report in late 2016, the Journal has detailed how weaknesses in the state’s adult guardianship/conservatorship system have left vulnerable, incapacitated people open to abuse and exploitation.

The push for reform was further fueled by the federal indictment in the summer of 2017 of the two principals of a large Albuquerque guardianship and fiduciary firm, Ayudando Guardians.

That same summer, the CEO of an Albuquerque conservatorship and financial firm, Desert State Life Management, was discovered to have embezzled more than $4 million from vulnerable clients. Both firms closed.

Desert State CEO Paul Donisthorpe is serving a 12-year prison sentence, and the Ayudando defendants are set for trial later this year on charges of bilking about $4 million – mostly from military veterans who were clients.

At a March 12 hearing on the latest reform initiative, House Judiciary Committee Chairwoman Rep. Gail Chasey, D-Albuquerque, asked Bacon, “Do you have provisions now where you believe you can prevent the abuse that occurred by the corporate guardian (Ayudando)?”

Bacon responded that the new law has added transparency and accountability in several ways.

She told the committee that new reporting forms required of guardians and conservators beginning last July are “far more detailed and are actually auditable.” The number of pages for guardian reports went from two to 20 under last year’s changes.

Bacon cited the more stringent reporting in explaining to legislators how she discovered what she believed was “skimming” from client accounts by the Guardian Angels firm.

Last week, Bacon told the Journal that after new, more detailed annual reports were required, a court-appointed professional guardian “was sifting through all kinds of information to make sure she was up to speed” on a particular client.

That’s when the guardian noticed that a client’s bank account had been transferred from Ayudando to Guardian Angels by the U.S. Marshals Service, which oversaw the closure of Ayudando and reassignment of 1,400 clients to other firms and guardians.

Ayudando, while providing both guardianship and conservatorship services, had also served as a representative payee for some clients, overseeing the regular Social Security or Veterans Affairs benefits received and paying client bills each month. (In some cases, the guardian or family member performs representative payee duties, but other times a private company is appointed and charges a fee for its services.)

Bacon said the professional guardian noticed that Guardian Angels, as the representative payee, had moved a client’s funds from one bank to another, and saw that the $200 promotional bonus for opening the new account had been withdrawn by Guardian Angels.

After more digging, the professional guardian alerted Bacon’s office and a hearing was held, which Crumpler attended. As the hearing progressed, Bacon said, she ultimately felt compelled to read Crumpler her Fifth Amendment rights against self-incrimination.

“I had this very good sense that this was a bigger problem, and so other judges started seeing the same thing and having hearings,” Bacon said. “So I reported it to the AG’s Office, and the AG ran with it.”

Crumpler was charged March 12 with a second-degree felony of embezzlement and tampering with evidence stemming from nearly $50,000 in transfers she allegedly made from client accounts, beginning in June 2018 and continuing through November.

According to the AG’s Office, Crumpler opened new accounts for 247 clients, withdrew the $200 bonus and placed it in her own account. She is alleged to have put the money back into the clients’ accounts to avoid being caught.

Bacon said last year’s law relaxed the traditional confidentiality imposed in guardian and conservator cases to give judges the discretion to allow access to a protected person’s case information, if warranted.

“It goes all the way back to the changes that we made and that there was a responsible corporate guardian who was able to access more records and ask questions.” Typically, the courts aren’t involved in appointing representative payees. That is left up to federal agencies.

‘Waiver of liability’

Another reform in the latest law bars conservators from requiring a “waiver of liability” before heirs to an estate can receive an inheritance or a share of assets.

“With some regularity, we saw two different things were happening,” Bacon said. “One, the conservator was holding hostage funds (heirs were waiting for) and saying, you’re going to sign a release (of liability). Or, the conservator was asking an incapacitated person to sign a release. Well, they (the protected person) don’t have (mental) capacity.”

The conservators, she said, “were using that to walk away from any perceived liability.”

Now, such waivers are null and void in future cases.

State Sen. James White, R-Albuquerque, who sponsored the legislation along with state Rep. Daymon Ely, D-Corrales, said of the new reforms, “I think we’ve raised the level of attention to this.”
“Hopefully, we closed all the loopholes, but you never know.”

Some guardianship reforms contained in Senate Bill 395:
• Permits judges to appoint court investigators to conduct on-site reviews every 10 years to assess the protected person’s status and continued need for a guardianship.
• Requires a lawyer appointed for the alleged incapacitated person, a guardian ad litem, to submit a written recommendations to the judge before a hearing on whether to grant a guardianship or conservatorship, thus allowing additional time for review.
• Specifies the type of document, such as a will, a person can use to designate choice of guardian or conservator if he or she becomes incapacitated in the future.

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New guardianship law offers more protections

Slimmer guardians bill gains steam

House Speaker Brian Egolf, D-Santa Fe, talks about a guardianship reform bill in the House Judiciary Committee on Monday. (Eddie Moore/Albuquerque Journal)

SANTA FE – The push for greater transparency in the state’s legal guardianship system gathered momentum in a House Judiciary Committee hearing Monday, just as the idea of tethering immediate reforms to a bigger overhaul within two years seemed to dim.

Committee members, who are expected to continue the debate today or Wednesday, appeared ready to strip the guardianship bill of its last nearly 200 pages, which would implement a new model Uniform Act of reforms that the courts say needs more study and dedicated ways of financing the changes.

That measure, spearheaded by Sen. Jim White, R-Albuquerque, passed the Senate last week by unanimous vote, with the Uniform Act to take effect in 2020.

But in recent days, legislators, analysts and the courts have been taking a closer look at the ramifications to better gauge the impact of major changes that would be required of the system, which currently involves an estimated 5,000 to 7,000 existing cases with about 500 new guardianship filings each year.

Stripping the Uniform Act from the measure would leave major, less costly reforms, including open guardianship hearings, expanded notice of court actions to families, greater visitation and bonding of non-family conservators.

House Speaker Brian Egolf, D-Santa Fe, told the committee that if it removed the Uniform Act, he would take steps to see that the rest of the bill moved directly to a House floor vote before the session ends at noon Thursday. “Don’t worry. If we don’t vote on this today, it doesn’t mean it’s not going to happen,” Egolf told the packed committee room.

The bill originally had been assigned to House Judiciary and then House Appropriations and Finance, a path that could very well have led to the measure dying in committee.

Rep. Damon Ely, D-Corrales, offered a slate of amendments to the remaining portion that are expected to be debated today.

Noting that part of his legal practice is devoted to suing other attorneys, Ely said, “I have sued some of these people (attorneys in guardianship/conservatorship cases) in that connection. It is tragic what’s happened.”

“There are a few bad apples that are a disaster, and we have to address it,” he said.

The issue of transparency, and how much is too much, arose during the Judiciary Committee hearing Monday. Currently, all guardianship and conservatorship hearings are closed to the public, and even some family members. But other states have open hearings, which advocates believe would improve accountability of guardians, the lawyers who file the cases and judges themselves.

In earlier versions of White’s bill, such hearings would be open to the public, unless a judge deemed otherwise. But that provision wasn’t included in the bill approved by the Senate, said attorney Jack Burton, who helped White prepare the original bill. The sponsors told the Journal the omission was inadvertent and would be fixed in the measure to be voted on by House Judiciary.

District Judge Shannon Bacon, who testified Monday at the hearing, said the judiciary supports opening hearings to the public. The measure would also give judges the authority to grant requests for guardianship or conservatorship court records that are currently sealed by law.

“It would allow law enforcement to request access to a file, access which currently doesn’t exist,” she said.

But Jim Jackson, director of Disability Rights New Mexico, told the committee, “We may be in the minority, but we think the emphasis towards transparency goes a little too far.” He said there could be privacy issues involved with just “anybody” having access to hearings.

Jackson said the measure, even without the Uniform Act, would provide more accountability by permitting more involvement of families in cases of their loved ones. Having more eyes on the process would also “help uncover some of the problems that have been out there,”Jackson said.
Ely questioned “what the hurry is with the Uniform Act.”

“It’s the sword of Damocles over the judiciary to completely change the system with the hope that some future legislature will fund it,” he said. An estimated $7 million would be required for the first two years of the Uniform Act.

Ely said New Mexico judges, who oversee guardians and conservators, generally don’t scare easily. “But I think they’re scared of the Uniform Act, and I think they should be,” he said.

White, who has been working on the Uniform Act adoption for a year, said he was able to secure about $1 million for the bill as is, but doesn’t know if that funding in House Bill 2 would remain if the model act is eliminated.



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Slimmer guardians bill gains steam

Former AG continues quest for adult guardianship office

BOSTON — Eighteen years after leaving office, former Attorney General Scott Harshbarger is asking lawmakers to pick up an unfinished piece of the reforms he sought around elder protection and adult guardianship.

Harshbarger on Monday asked the Judiciary Committee to throw its support behind a bill that would establish a state office of adult guardianship as a public-private partnership that would handle the appointment of guardians for adults who cannot make their own legal decisions and lack family, friends or access to volunteers who could step into the role.

The office would serve “the poor and the powerless,” Harshbarger said, including people who are elderly and intellectually or developmentally disabled.

Harshbarger, who became attorney general in 1991 and left office in 1999 after an unsuccessful gubernatorial bid, said creation of such an office has been proposed for years.

“The missing piece in it has been how would we fund this,” Harshbarger said. “We happen to propose an innovative way — nonprofit funding. All we’re asking for is that the state agency have oversight and a nonprofit agency will be the office of the public guardian, supported by public funding.”

Rep. Paul Brodeur’s bill (H 3027) would set up an office within the Executive Office of Health and Human Services to supervise a privately funded nonprofit that would provide guardianship services.

Brodeur, a Melrose Democrat, said the office would serve between 4,100 and 4,700 people in Massachusetts who “truly have no one but the Legislature and advocacy groups to fall back on for help.”

He said such people may need legal decisions made on their behalf when being discharged from a hospital or admitted to a nursing facility.

“There’s no one in some cases that can speak with legal authority for that person,” Brodeur said.

“What does that mean? It very often means that the hospital or the provider will have to go into court, find a guardian and make arrangements to put that decision into force. That usually happens in a time, essentially, of crisis.”

Peter Macy, the executive director of Guardian Community Trust, said the bill proposes a “radical new way to fund guardianship,” and 60 percent of the necessary private funding has already been pledged.

He said a business plan has been developed calling for approximately $800,000 annually in private dollars to “entirely fund the operational side of a public guardian,” leaving the state’s cost at around $400,000 for a supervisory office with between three and five staff members.

“Creating the office of public guardian is critical,” Macy told the committee. “We must have it. We cannot get the private dollars without your help to create a tiny government office.”

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Former AG continues quest for adult guardianship office