The Sun Sentinel reported the disturbing story of a nursing home owner, Dr. Jack Michel, who was allowed to take over the Rehabilitation Center at Hollywood Hills even though he’d been hit with a $15.4 million fine years earlier to settle claims that he and others swindled Medicare and Medicaid. Dr. Michel was a key figure in a civil suit brought by the U.S. Department of Justice for massive health care fraud.
Incredibly, it is common practice in the health care industry to allow people and corporate entities found guilty of fraud to write checks to the U.S. government then continue operating nursing homes and participate in the very programs they were guilty of defrauding. He had been accused by the government of taking kickbacks for hospitalizing elderly patients when they didn’t need to be hospitalized.
“Why was he allowed to take over the nursing home after having been accused in federal court of bilking Medicare and Medicaid?”
“A civil settlement with no admission of wrongdoing does not preclude purchasing a nursing home. There is no law or statute that precludes it,” Michel’s lawyers, Julie W. Allison and Geoff Smith, said. “Many health care professionals — including those who have gone on to hold elective office — have served in companies that have settled claims with DOJ,” the attorneys said in the statement released to the Sun Sentinel. They were referring to Florida Gov. Rick Scott, who founded HCA but left in 1997 in the midst of a federal investigation that led to a $1.7 billion health care fraud settlement.”
Michel and his companies agreed to five years of “special monitoring”, but were never expelled from participating in Medicaid or Medicare — a vital element to running a nursing home.
In fiscal 2007, the year of Michel’s settlement, the government barred more than 3,300 service providers from federal health insurance programs for misconduct, usually criminal, according to statistics from the U.S. Health Care Fraud and Abuse Control Program. That same year it collected $1.8 billion in civil settlements. By fiscal 2016, it was up to $2.5 billion. As of mid-November, the federal government had about 380 of these “Corporate Integrity Agreements” ongoing nationwide with hospitals, hospices, pharmaceutical firms, nursing homes, diagnostic imaging centers, doctors and others, according to the U.S. Health and Human Services Office of Inspector General’s web site.
Harvard health care Professor David Grabowski, who’s researched the economics of long-term care, said policy makers in Florida and other states should consider tightening the criteria for owning a nursing home, given the approval of Michel.