by Tyra Phipps, Ed.D. (tyra.phipps@gmail.com)

Grace Manor Assisted Living and Memory Care facility was given twenty days to shut down on July 26, 2016 by the State of Florida Health Care Administration.  One resident who had a diagnosed sex addiction was found naked in rooms with other residents, yet the administration of Grace Manor turned what is called a “blind eye” to the situation.  Despite complaints, and the fact that the staff was instructed to lock doors, also maintain a 24 hour watch on the resident in question, nothing was done.  Innocent residents were victimized.  The state ordered Grace Manor to stop taking in new residents and relocate every resident to other facilities as reported by Mr. Abe Aborava, July 13, 2016, with National Public Radio, station 90.7 WMFE that serves Central Florida including Daytona and Melbourne.

 

On July 23, 2016 the Federal Investigators put an end to a one billion-dollar Medicare fraud in Miami, Florida.  As reported by Mr. Wolfgang Rattay with Reuters, “Philip Esformes and two other defendants are accused of running the biggest Medicare fraud in the nation’s history. Esformes was arrested at his Miami Beach waterfront estate.

Esformes, 47, is the owner of a network of about 20 assisted-living facilities in the Miami-Dade area, the Miami Herald.  He is accused of using the facilities to exploit Medicare, by filing false claims for unnecessary services for the past 14 years.  In some cases, the services he billed Medicare for were not even provided.

He did not work alone on this.  The US Attorney’s office also charged Arnaldo Carmouze, 56, and Odette Barcha, 49.  It is believed that they conspired to use their connections in healthcare to refer patients to Esformes.  Physicians and healthcare professionals at one unnamed hospital were found to have received kickbacks in exchange for referring thousands of Medicare patients to Esformes’ network.”

The federal investigation of this one billion-dollar Medicare fraud in Florida began in 2009.  For seven years, families of patients and residents in these healthcare facilities run by the Estformes network, and paid for care that their loved ones never received.  It also happened in Indiana.

Ms.  Madeline Buckley reported for the Indianapolis Star on September 15, 2015 that the FBI raided the residence of Mr. James G Burkhart, CEO of American Senior Communities (ASC).  Criminal activity was suspected as Mr. Burkhart worked out of a 9000 square-foot multimillion dollar home located in Carmel, Indiana.  The Office of the Attorney General for the United States Department of Health and Human Services participated in the raid confiscating papers and folders.  They investigated allegations of fraud and abuse in federal health care programs like Medicare and Medicaid.  There are 100 facilities with American Senior Communities and most of them are located in central Indiana.  In 2010, many facilities lost their licenses and there were criminal convictions, yet they continued to operate for five more years before the FBI raid.

The story does not end there.  In August 2020, Mr. Tony Cook reported in the Indianapolis star that more people are under investigation.

“Among those identified in ASC's internal investigation was Rob New, a former Fishers businessman who coached boys’ basketball at Scecina Memorial High School. The company's analysis claimed he participated in alleged schemes that resulted in millions of dollars in losses. And in court filings last year in its civil lawsuit against Burkhart, the company again accused New of participating in fraud schemes with Burkhart. New is not a defendant in the case. New has never been charged with a crime. He denies any wrongdoing and his attorney called the allegations in the lawsuit against Burkhart “meritless and spurious.” Last year, New sold his Fishers mansion for $3 million to NBA star Gordon Hayward and now lives in a luxury high-rise condo near the beach in Naples, Florida.

Another person named in the company’s investigation is Gretchen Zoeller, the cousin of then-Indiana Attorney General Greg Zoeller. His agency was part of the criminal investigation and he accompanied prosecutors when charges against Burkhart and others were announced. He told IndyStar he was unaware his cousin was involved in the nursing home scandal at the time. ASC is now suing Gretchen Zoeller for her alleged role in the schemes. She, too, has not been charged with a crime, and denies participating in any fraud.

Although the nursing home buildings are privately owned, and managed under contract by ASC, the businesses are technically owned by Marion County’s public health agency and funded mostly with Medicaid and Medicare tax dollars. The leader of that agency, the Health & Hospital Corp. of Marion County, is Matthew Gutwein. He knew about the findings from ASC's internal investigation but quietly signed an agreement with the company in 2017 that allowed it to keep operating the homes. The agreement, which was never publicly announced, recovered only $15.5 million — far short of the estimated losses identified in ASC's own investigation. It also contains several secrecy provisions that helped keep a lid on the suspected scope of the fraud, IndyStar found.  A lawyer for Health and Hospital Corporation (HHC) defended the deal, arguing that it made the government whole and outweighed the cost and uncertainty of additional litigation. HHC said ASC's secret report was preliminary and the estimated losses it claimed were inflated because not every allegation could be substantiated.”

According to AARP, “As IndyStar reported in March, HHC and more than 20 other county hospitals across Indiana have bought up nearly every nursing home in the state, at least on paper, to take advantage of a program that provides extra Medicaid funds to government-owned facilities. The money is intended to provide care for vulnerable nursing home residents, but HHC and others exploited rules that allowed them to legally divert much of it to their hospitals instead, leaving Indiana with the worst elder care system in America.”

Is it easy to commit Medicare and Medicaid fraud?  Yes, just like in Miami and Indaina, a study through the Center for Public Integrity with an analysis of more than 10,000 nursing homes across the country found the discrepancies in staffing levels reported in nursing homes.  According to Mr. Jeff Kelly Lowenstein, who reported on November 12, 2014, the level of nursing care in Arkansas was twice the level existing in the analysis of financial cost reports.  One example is Chenal Heights which provided nineteen hours or about eleven minutes of registered nurse care each day for the resident who lived there in 2012, but the more difficult to find federal finance documents reported average daily staffing levels at that home were considerably lower.  How can this happen?  It is called artificial inflation of the numbers and the hours of actual care rendered patients.

The federal agency responsible for looking over the nursing homes is known as the Center for Medicare and Medicaid Services.  Even though it has known about inflated levels of staffing since 2001, the inaccuracy of the self-reported data continues.  This means that any federal government quality rating is inaccurate or misleading the public into thinking that a facility may be five star rated when in fact, it is only a one star rating.  Why does that happen?  Nursing homes really prepare for these investigations and visits by the government inspectors, making the widespread discrepancies in staffing levels difficult to detect.  By 2005, the agency reports that were analyzed by the Center found that there were thousands of cases where staffing levels were much lower across nursing facilities in many states.

Where does that leave families and caregivers who are trying to make the best decisions for their loved ones?  One answer is in the following personal story of Ms. Edna Irvin.

Administrative lies, Medicare fraud, and understaffing in long-term care facilities leads to stories like the one reported by Mr. Jeff Kelly Lowenstein, November 12, 2014.  Ms. Edna Irvin was a resident of Chenal Heights Health and Rehabilitation Center in Little Rock, Arkansas.  She had dementia and was confined to a wheelchair, but she loved to help other people.  She had been a certified nursing assistant and won awards for perfect attendance.  Ms. Lisa Sanders was the youngest daughter and had placed Ms. Irvin at Chanel Heights.  She had relied on the advice of the physician treating her mother. The daughter had moved her mother to Chenal Heights with the assumption that staffing levels and care for her mother would be similar to the charm of the neighborhood surrounding the facility.  Ms. Sanders arrived at the home to find her mother sitting in her own feces.  After just one week, Ms. Irvin was hospitalized with a bowel obstruction.  It turns out that the nursing home was renamed as part of a change in ownership and also declined to comment on anything that happened to Ms. Irvin.

Medicare and Medicaid fraud are rampant.  It took federal investigators seven years to stop the Medicare fraud in Miami.  Research from the 1990s and the years 2000 and beyond point to the same problems of understaffing, discrepancies in reporting numbers, and the need for more highly trained staffing.  Despite relevant findings and warnings, what prevails is the inappropriate placement of residents with behavioral disorders, management that lies, distorts, or misrepresents numbers leading to discrepancies in reporting, and fraud that shuts down facilities leaving families with a big question mark about where to get help for their loved one.

As recently as February 2023, Twenty-three Michigan residents were charged in connection with two fraud schemes involving Medicare, totaling more than $61.5 million included healthcare fraud, conspiracy to commit healthcare fraud, conspiracy to defraud the U.S. through payment and receipt of illegal healthcare kickbacks, money laundering, receipt of illegal healthcare kickbacks, and payment of illegal healthcare kickbacks.

Questions for Consideration:

 1.  What happens to a loved one when the facility is closed by the state?  The management of the facility is responsible for safely relocating each resident to a comparable facility providing the same level of care.  The facility is also responsible for the cost factors.  However, if any facility is run so poorly that it is shut down by the state, it is likely that there will be even more problems in relocating a resident.  The transition involves much stress, with little time to visit or assess other possible assisted-living rooms or skilled nursing facilities.  It is a good idea to have a contingency plan, or plan B in the event there is a forced shut down of the facility.

2.  What can be done about Medicare fraud?  Inspect bills.  Cross-reference statements and pay attention to billing cycles.  Is there only one statement per month, or is the facility management trying to get a second billing for the same month?  It is easy in the haste of looking over statements to just pay whatever comes in the mail.  Most people are fully trusting of administrators in long-term care.  The price to pay for being trusting without inspecting may be very high.

3.  Is there any way to safeguard a loved one from being placed in a long-term care facility that is not highly rated in the five-star category?  Yes, and the answer is doing homework.  Even if something appears on the Internet about a five-star rating, investigate more behind the scenes.  Investigate the date of the rating.  Pages can hang around on the Internet for extended periods of time without updates.  A five-star facility that was trusted by many people can also be part of a merger or acquisition with other companies.  The ensuing chaos frequently causes a change of personnel and what can result is a dysfunctional facility not at all like what appears on the Internet.  Visiting on different occasions and unannounced is probably the best approach to combine with doing the research and background checks of any assisted-living, skilled nursing, or Alzheimer’s unit.

March 2023