What is going on in Wisconsin?  Nursing homes that receive Medicare and Medicaid are required by federal law to report all instances of alleged mistreatment, neglect or abuse, including injuries of unknown origin, to the state health department’s Division of Quality Assurance within 24 hours.  A recent investigation by the Wisconsin Center for Investigative Journalism found facilities do not get punished when they fail to comply with the legal requirement and report incidents.  Most of the time they don’t even investigate the incidents themselves.

Families of residents complain that facilities’ failure to report serious injuries or deaths related to abuse or neglect is not uncommon, and the state health department only learns about incidents after a family member files a complaint.  In some cases, nursing homes file internal reports after a resident injury or death, but do not report the incident to the state, in hopes to cover up the incident.

The number of complaints the state received about Wisconsin nursing homes and assisted living facilities rose from 1,684 in 2000 to 2,562 last year — an increase of more than 50 percent.  At the same time, the Wisconsin health department has cut its staff of full-time nursing home surveyors from 100 in 2002 to 64 in 2012 despite an aging baby-boomer population. A state report found that Wisconsin will have 1.3 million residents over 65 by 2030, compared to about 777,000 residents in 2010.

Meanwhile new laws to help nursing homes avoid accountability prevent juries from hearing about state investigation reports of nursing homes even in criminal cases which means that more neglect or abuse will go undetected and unpunished. Critics say the law removes a useful tool for ferreting out abuse and neglect, noting that attorneys cannot use state inspection reports to affirm allegations or impeach witnesses.

Representative Jon Richards, a Democrat from Milwaukee, says the new law is making it harder for families to win their cases in court. “The bill was passed, nominally, to produce job creation, but I don’t see how letting abusers off the hook creates a single job. That is a real problem.”

 

 

Articles at HaywardWI.com, GreenBayPressGazette, and Wisconsin in Watch.

 

The L.A. Times reported on the recent settlement between California and Skilled Healthcare Group Inc.  Skilled had violated dozens of regulations over poor patient care.  According to AG Harris’ office, the state Department of Public Health issued 76 citations to the company’s nursing homes from 2008 to 2012. They alleged that patents had been subjected to conditions such as pressure ulcers, dehydration, malnutrition and over-medication, largely because of inadequate staffing.

They operate 20 nursing homes with over 2300 beds in California.  This chain will increase its staffing levels only in California to provide adequate care.  As part of the agreement, an independent monitor will ensure that Skilled Healthcare Group Inc. complies with state staffing laws.

“This is a case about neglect and abuse of California’s elders by a facility that was supposed to protect and care for them,” Harris said in a statement. “At a time when California’s elderly population is growing twice as fast as the general population, family and friends should have peace of mind that their loved ones are being well cared for when they are in a nursing home setting.”

 

Time Magazine had an interesting article explaining how and why health care bills are so expensive.  A for-profit system encourages waste, greed, and outlandish markups.  Executive compensation is ridiculous.  The article gives great details but here are some excerpts.

"Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock. When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?"

"The result is a uniquely American gold rush for those who provide everything from wonder drugs to canes to high-tech implants to CT scans to hospital bill-coding and collection services. In hundreds of small and midsize cities across the country — from Stamford, Conn., to Marlton, N.J., to Oklahoma City — the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to midlevel hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over $1 million."

 

"Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries."

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The Orlando Sentinel reported on the recent Florida Supreme Court decision permanently altering contract law in Florida. In a giant win for the nursing-home industry and a loss of Florida elderly consumers, the state Supreme Court decided that a lawsuit stemming from the wrongful death of a nursing-home resident must go to mandatory arbitration despite the lack of a proper signatory.

Debra Laizure, whose father, Harry Stewart, died in 2006, about four days after being admitted to the Avante at Leesburg nursing home, pursued a wrongful-death case against the facility.  Laizure did not sign the arbitration agreement when her father entered the nursing home.  Stewart was admitted to the nursing home after undergoing knee surgery at Leesburg Regional Medical Center.  Stewart developed a horrific infection because of neglect at the nursing home.  He was transferred back to the hospital before dying.

Mandatory arbitration agreements strip away people’s rights to jury trials.  Most nursing-home residents and their families do not understan arbitration when the documents were signed.  The senior-advocacy group AARP filed a brief on behalf of Laizure, who is the representative of Stewart’s estate.  The Florida Health Care Association, a nursing-home industry lobbying group, filed a brief supporting mandatory arbitration agreements.

 

The Telegraph reported that Tina Arnold, administrator of the estate of Helen R. Cline, a former patient at Eldercare of Alton, has filed a lawsuit in claiming the facility allowed the patient to develop an infection that led to her death.  The incident also was the subject of an investigation by the Illinois Department of Public Health, which issued a report that said the facility failed to provide adequate care and did not meet its legal requirements to prevent mistreatment of patients.  Cline suffered from septic shock, delirium, dehydration, extremely low blood pressure, bed sores, urinary tract infection and an excessive amount of a blood thinner, among other injuries and illnesses.

 

Recently Congress continued a little-known process that allows exceptions to what Medicare pays for physical, occupational and speech therapy. The Medicare limits before the exceptions are $1,900 for physical and speech therapy this year, and $1,900 for occupational therapy.  Medicare is prohibited from denying patients coverage for skilled nursing care, home health services or outpatient therapy because they had reached a “plateau,” and their conditions were not improving. That will allow people with Medicare who have chronic health problems and disabilities to get the therapy and other skilled care that they need for as long as they need it, if they meet other coverage criteria.

Nursing home residents will also get coverage for skilled care regardless of improvement, but does not change the duration, which is still limited to up to 100 days per “benefit period.” That begins when a patient is admitted as an inpatient to a hospital or a nursing home for skilled care and ends after 60 days without skilled care. The agreement preserves the requirement that they must also have spent at least three days as inpatients in a hospital.

Beneficiaries also often lose Medicare coverage for outpatient therapy because they hit the payment limit. But under the exceptions process Congress continued for another year, the health care provider can put an additional code on the claim that indicates further treatment above the $1,900 limit is medically necessary. When treatment costs reach $3,700, the provider can submit medical documentation to support a request for another exception to cover 20 more sessions. 

In 2011, nearly five million seniors received therapy services at a cost of $5.7 billion, and about one out of every four received an exception to the then-$1,870 limit, according to the Medicare Payment Advisory Commission, an independent government agency that advises Congress.

 

 

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The New York Times reported "a sharp and surprisingly persistent slowdown in the growth of health care costs is helping to narrow the federal deficit."  The Congressional Budget Office said health spending growth continued at its lowest rate in decades.  In figures released, the Congressional Budget Office said it had erased hundreds of billions of dollars in projected spending on Medicare and Medicaid. The budget office now projects that spending on those two programs in 2020 will be about $200 billion, or 15 percent, less than it projected three years ago. New data also show overall health care spending growth continuing at the lowest rate in decades for a fourth consecutive year.

The slowdown has occurred in both government and overall health spending. From 2009 to 2011, total health spending grew at the lowest annual pace since the government started keeping records 52 years ago, a trend that seems to have continued last year. In the 2012 fiscal year, Medicare spending per beneficiary grew just 0.4 percent. The new Congressional Budget Office data said that overall Medicare outlays grew 3 percent in 2012, the slowest rate since 2000.

According to calculations by White House economists, slowing the annual growth rate of health care costs by 1.5 percentage points might increase economic output by 2 percent in 2020 and 8 percent in 2030. It might also lead to higher wages for workers and more room for productive investments in the budget.

 

USA Today reported the Obama Administration recovered $4.2 billion in health care fraud money in 2012, continuing the trend of large investigations that has been breaking records since Obamacare was passed in 2010.  The 2010 health care law created one agency and expanded another to fight health care fraud, resulting in nine Medicare Fraud Strike Force Teams that sprouted up in areas particularly prone to Medicare fraud — such as Texas and Florida.

Health and Human Services Secretary Kathleen Sebelius said for every dollar spent on fraud and abuse in the past three years, the government brought $7.90 back in through lawsuits and fines.

 

The government also identified 150,000 ineligible Medicare providers by screening the providers who participate in the program in 2012. They recovered $3 billion through settlements and judgments through whistle-blower claims that included illegal pricing by drug manufacturers, marketing medical devices and medications for uses that have not been approved, and fraud by hospitals and other health care providers. And they recovered $1.5 billion in fines and forfeitures.

 

The Daily Journal reported that two former employees of the Momence Meadows Nursing Center, who turned whistleblowers against their employer in 2004, helped convince a jury in federal court that the nursing home abused its residents and filed phony Medicare and Medicaid claims — prompting a $28 million verdict against the former owner.

Following a two-week trial in Urbana, a jury found that Jacob Graff oversaw a home that "provided worthless services to the residents," and hit him with the stiffest civil penalty it could.

 

 

The New York Law Journal reported recently that Fundamental Long Term Care Holdings, L.L.C. and its owner/members Murray Forman and Leonard Grunstein lost the appeal of the Court Order upholding the option giving Rubin Schron 1/3 ownership interest in Fundamental and all the nursing homes they operate.  The Order stated:

‌This lawsuit is one of several between business entities controlled by plaintiffs Leonard Grunstein and Murray Forman and defendant Rubin Schron (see also Schron v. Troutman Sanders LLP __NY3d __ [2013] [decided today]). Cammeby’s Funding LLC (Cam Funding) is a limited liability company managed by Schron, a real estate investor; Fundamental Long Term Care Holdings LLC (Fundamental) is a limited liability company whose sole members are Grunstein — formerly Schron’s attorney — and Forman — formerly Schron’s investment banker.

 

In 2003, SWC Property Holdings LLC (SWC), another company controlled by Schron, acquired the facilities and real estate occupied by a string of 26 nursing homes and, through subsidiaries, leased these properties to an independent operating company [THI Holdings, LLC].  In 2006, Grunstein and Forman purchased [THI of Baltimore, Inc. from THI Holdings] all of the issued and outstanding capital stock of these nursing homes, having formed Fundamental in December 2005 for the purpose of owning companies that manage healthcare facilities. Grunstein and Forman each contributed $50 in equity for a half interest in Fundamental; they paid $10 million for the stock, financed by debt. Additionally, Schron executed a covenant not to sue on any claims that SWC, the landlord, might have against the nursing homes.

On July 1, 2006, Fundamental and Cam Funding entered into an option agreement entitling Cam Funding (or its designee) to acquire one-third of Fundamental’s membership units for a strike price of $1,000, provided the option was exercised on or before June 9, 2011. This agreement was signed by Forman, as manager of Fundamental, and was accepted and agreed to by Schron, as manager of Cam Funding, and Grunstein and Forman, the sole members of Fundamental.

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Sections 5 and 6 obligate Fundamental, Grunstein and Forman to facilitate, and prohibit their interference with, Cam Funding’s exercise of the option. Specifically, in section 5, Fundamental agreed not to

"cause, suffer or permit any of its subsidiaries to, enter into any agreement or commitment with any unitholder, subscriber, officer, director or employee or other person that would conflict with or interfere with any of the rights of [Cam Funding] under this Agreement, including (without limitation) the exercise of the Option, and any such conflicting agreement or commitment shall be deemed void and of no force or effect."

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On December 20, 2010, Cam Funding notified Fundamental in writing that it was exercising the option, designating Quality Health Services LLC to acquire the ownership interest, specifying January 20, 2011 at its lawyers’ offices as the date and place of closing, and enclosing a certified check for $1,000. On January 18, 2011, Fundamental responded that, pursuant to its operating agreement, "no membership units in Fundamental can be issued to [Cam Funding] until… [Cam Funding] provides the required capital contribution of ‘at least the fair market value’ of its proposed interest, which is 33.33 percent."

 

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At the time Cam Funding exercised the option, the market value of a one-third interest in Fundamental was estimated to be more than $33 million.

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Consistent with Supreme Court’s decision, Cam Funding proposed an order directing the clerk to enter judgment declaring that Fundamental was required to "close on the Option promptly following the completion of all required regulatory filings and approvals, if any." The judge signed this order, which was entered on October 6, 2011. Fundamental then appealed; on December 13, 2011, the Appellate Division issued a stay of Supreme Court’s orders pending hearing and determination of the appeal.

In a decision issued February 7, 2012, the Appellate Division affirmed (92 AD3d 449 [1st Dept 2012]). The court concluded that "[r]egardless of which document was executed first," the option agreement unambiguously entitled Cam Funding to acquire one-third of Fundamental’s membership units for $1,000 "without the need for any capital contribution" (id.).

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On May 22, 2012, the same panel denied Fundamental’s motion for leave to appeal, and granted Cam Funding’s cross motion to vacate the stay. Fundamental then asked us for permission to appeal, and on June 5, 2012, a Judge of this Court granted an interim stay pending the motion’s resolution. On September 11, 2012, we granted Fundamental’s motions for leave to appeal and a stay (19 NY3d 1012 [2012]). We now affirm.