SCNow reported in 2013 that Richard C. Cooke pleaded guilty to several crimes connected to fraudulent activity in his operation of six nursing homes, including three in the Pee Dee.  Cooke pleaded guilty to two indictments charging him with forgery and four indictments charging him with medical assistance provider fraud.  Cooke was sentenced to 10 years on the two forgery indictments, suspended to five years probation and three years each on the Medicaid fraud charges, all suspended to probation. Cooke’s probation conditions include house arrest for one year and 500 hours of community service, plus the full restitution.  So Cooke steals more than a million dollars from the taxpayers and only gets probation?

“Fraud committed against the Medicaid program deprives funds needed to pay for medical services, including nursing home care for elderly citizens who can’t afford it otherwise,” S.C. Attorney General Alan Wilson said after the sentencing.

Indictments show Cooke submitted fraudulent cost reports to the South Carolina Medicaid program in his role in Cooke Management Company Inc. of Lake View, which operated six nursing homes across the state. Those nursing homes included Florence Rehab and Nursing Center in Florence, Sunny Acres in Fork and Kingstree Nursing Facility in Kingstree.

Under South Carolina Medicaid regulations, nursing homes are required to submit annual operational cost reports for their facilities. The Medicaid program pays the nursing home based on that and on the number of Medicaid residents. From 2009 through 2011, the six nursing homes Cooke oversaw were overpaid more than $1 million as a result of fraudulent items listed on cost reports submitted to Medicaid.

Under the terms of the plea agreement, Cooke was required to plead guilty to all charges, to make full restitution to the S.C. Medicaid program, to be excluded from the Medicaid program for life and to cooperate with the ongoing investigation by the S.C. Attorney General’s Office.

WSBT reported that marijuana was found in the Oreos at an Indiana nursing home.  Officers were called to the Golden Living Center to investigate where an elderly resident got Oreo cookies tainted with THC, the active ingredient in Marijuana.

According to the resident, the cookies were from Michigan and used for medicinal purposes. He says they helped manage his pain. The resident would not reveal who brought the cookies to him. About 20 cookies were seized and destroyed, police said.

Commercial Appeal reported on the lawsuit unsealed in federal court in Memphis alleging that Spring Gate Rehabilitation and Healthcare Center nursing home gave heavy anti-psychotic drugs to residents to keep them “docile.”  The complaint alleging Medicaid and Medicare fraud by the facility argued that the company provided “worthless” services to residents between 2012 and 2015. Now the company will pay a $500,000 settlement, and has entered into an agreement with the Department of Health and Human Services to prevent such conduct in the future, the U.S. Attorney’s Office said.

According to the lawsuit, Spring Gate, operated by Memphis Operator, LLC, prescribed a resident heavy doses of anti-psychotic and anti-anxiety drugs in 2013 “despite the fact that there was never a medically accepted indication justifying such heavy-duty medications.”

“After Spring Gate prescribed these psychoactive drugs, (her) condition quickly deteriorated,” according to the complaint. “Spring Gate internal reports described her as confused and unsteady, prone to staring off into space. She fell multiple times …”

Her nephew raised concerns to Spring Gate and “to his great surprise, the nursing staff openly admitted to (him) that (she) was being prescribed these drugs ‘to keep her in the bed,'” according to the lawsuit.

KPCC reported the latest data from the federal Centers for Medicare & Medicaid Services, known as CMS, regarding the percentage of long-term nursing home residents being given antipsychotic drugs dropped from about 24 percent in late 2011 to under 16 percent last year. Decreases were reported in all 50 states, with the biggest in Tennessee, California and Arkansas.  However, 16 percent is still way too high.

“Given the dire consequences, it should be zero,” said attorney Kelly Bagby of the AARP foundation, which has engaged in several court cases challenging nursing home medication practices. Bagby contends that the drugs are frequently used for their sedative effect, not because they have any benefit to the recipients.

Experts and advocacy groups — including the Washington-based Center for Medicare Advocacy and AARP Foundation Litigation — say even the lower rate of antipsychotic usage is excessive, given federal warnings that elderly people with dementia face a higher risk of death when treated with such drugs. Some nursing homes are finding other medications that sedate their patients into passivity without drawing the same level of scrutiny as antipsychotics.

Analyzing the latest government data, Human Rights Watch estimates there are now about 179,000 people in nursing homes who get antipsychotics every week without having a diagnosis for which the drugs are approved.

“Antipsychotic drugs alter consciousness and can adversely affect an individual’s ability to interact with others,” the new report says. “They can also make it easier for understaffed facilities, with direct care workers inadequately trained in dementia care, to manage the people who live there.”

The report also says that nursing homes, in violation of government regulations, often administer antipsychotic drugs without obtaining consent from residents or the relatives who represent them.

Hannah Flamm, the report’s lead author, said the recent data showing a decline in antipsychotic usage demonstrated how extensive the overmedication problem had been. In an interview, she said the lower numbers don’t impress her.

Would you want to go into nursing home if there’s a one in six chance you’d be given a drug that robs you of your ability to communicate?” she asked. “It’s hard for me to applaud the reduction when it’s inexcusable to ever misuse these drugs.”

Advocacy groups contend that federal enforcement of medication regulations has been too lax and will only grow more lenient as President Donald Trump’s administration pursues an agenda of deregulation.

“They’re helping the industry, not the patients,” said attorney Toby Edelman of the Center for Medicare Advocacy:


CNN had a great article on the new Human Rights Watch report, “‘They want docile:’ How Nursing Homes in the United States Overmedicate People with Dementia.”  “Children complained about parents who were robbed of their personalities and turned into zombies. Residents remembered slurring their words and being unable to think or stay awake. Former administrators admitted doling out drugs without having appropriate diagnoses, securing informed consent or divulging risks.”  The under-staffing of nursing homes is a major factor of such over-medication.

The 157-page report estimates that each week more than 179,000 people living in US nursing facilities are given antipsychotic medications, even though they don’t have the approved psychiatric diagnoses — like schizophrenia — to warrant use of the drugs. Most of these residents are older and have dementia, and researchers say the antipsychotic medications are administered as a cost-effective “chemical restraint” to suppress behaviors and ease the load on overwhelmed staff.
What’s revealed in this report echoes the findings of a CNN investigation published in October. The CNN story described how one little red pill, Nuedexta, was being misused and overprescribed in nursing homes. What’s more, CNN learned that this overuse benefited the drugmaker to a tune of hundreds of millions of dollars, largely at the expense of the US government. The CNN report prompted an investigation into a California-based pharmaceutical company.
The Food and Drug Administration has not deemed antipsychotic drugs an effective or safe way to treat symptoms associated with dementia — including dementia-related psychosis, for which there is no approved drug. In fact, the FDA cautions that these drugs pose dangers for elderly patients with dementia, even doubling the risk of death, the report shows. Other possible side effects outlined in the report include an onset of nervous system problems that may cause “severe muscular rigidity” or “jerking movements,” as well as low blood pressure, high blood sugar, blood clots and other problems.
There are plenty of ways to deal with dementia-related symptoms or behaviors that don’t involve pharmaceuticals, the report lays out. Improvements can be achieved through providing activities, reducing loneliness, creating routines, encouraging relationships with familiar staff members, offering exercise and promoting programs like music therapy and pet therapy.
The government has long-recognized the problem of overusing antipsychotic medications and is required to monitor the use of such drugs, the report shows. In fact, in 2012, the Centers for Medicare & Medicaid Services established the National Partnership to Improve Dementia Care in Nursing Homes in acknowledgement of this issue.  “The US government pays nursing homes tens of billions of dollars per year to provide safe and appropriate care for residents,” said Hannah Flamm, a New York University Law fellow at Human Rights Watch. “Officials have a duty to ensure that these often vulnerable people are protected rather than abused.”

The Philly Inquirer reported that three unsecured creditors (Healthcare Services Group Inc., McKesson Medical-Surgical Minnesota Supply Inc., and Medline Industries) have filed an involuntary bankruptcy petition against New Castle Health and Rehabilitation Center nursing home that is part of a chain of 22 facilities, mostly in Pennsylvania, that were put into receivership in September by their landlord.

The creditors said in their Jan. 12 petition that New Castle Health and Rehabilitation Center owed them a total of $262,529.

The owner of the New Castle nursing home is Oak Health & Rehabilitation Centers Inc., a nonprofit headed by Bala Cynwyd lawyer Howard Jaffe. Oak was formed to take over 22 former Extendicare facilities, including 20 in Pennsylvania and one in West Virginia, in additional to the New Castle facility, in 2015.

 The landlords of the Oak facilities, affiliates of Formation Capital, a major player nationally in nursing-home ownership, put all 22 Oak facilities in receivership, a state court alternative to bankruptcy that provides no protection for unsecured creditors, after Oak missed at least three rent payments totaling $10.5 million.

The goal of the receivership was to bring in a new operator for the nursing home with no guarantee of money for vendors’ unpaid bills.


The Claude Pepper Center at FSU uses information and data from multiple sources to help inform policy makers, researchers, teachers, the media and the general public about the health, long term care and income security challenges confronting the nation’s older citizens.

In pursuing this mission, The Center has generated several articles, book chapters, reports, op ed columns and blog postings that can be found in the Social Media and Reports section of the website.

All of our activities are dedicated to sustaining the senator’s view that “the national attitude toward old people has made a 180-degree turn. More and more, younger generations have come to realize that in their elders they have a precious and useful asset, not a burden. Old people are the same persons they were when they were young. Some may not hear so well, may have to wear glasses, maybe are a step slower when they walk. But they are not useless, and they must not be treated as outcasts, as more and more Americans have come to realize.”

Nursing homes are increasingly owned by private investment groups who manage them through complex administrative structures that make the assignment of responsibility for deficiencies in care provided to the residents very difficult. These investment groups also tend to reduce operational costs by reducing the staff who provide care (RNs and CNAs) creating greater potential that residents will receive less care of adequate quality than they need. These concerns have been exacerbated by the fear among advocates for higher quality care in nursing homes that the Trump administration will reduce the already inadequate regulatory framework for maintaining an acceptable level of quality of care in nursing homes.

The following articles address several dimensions of the quality of care concerns. We will continue to track developments in this area over the next several months.

Important Articles:


Authorities say a 76-year-old woman found dead outside the Ohio nursing home where she lived died of hypothermia.

The Putnam County sheriff is investigating Phyllis Campbell’s death at the Hilty Home in Pandora, roughly 50 miles southwest of Toledo.

Campbell was found outside the facility on a Sunday morning, when temperatures around much of Ohio were still below freezing.

The sheriff’s office says an autopsy showed Campbell died from hypothermia. Authorities haven’t released details about what happened.

The facility is part of Mennonite Home Communities of Ohio, whose CEO said by email Wednesday that it’s grieving Campbell’s death and extending sympathies to her family. CEO Laura Voth says administrators are working with authorities to conduct a thorough investigation but can’t publicly discuss details of the case.

The Nonprofit Quarterly had an article explaining  that nonprofits produce better outcomes for less money than for-profits do. Prime among these fields are hospice and long-term care. The research is relatively consistent: Do mission-driven nonprofit organizations deliver higher quality care to elders? When it comes to nursing homes, it appears the answer is a decisive “yes.

Multiple studies over the last two decades indicate that for-profit ownership of nursing homes, particularly for-profit chain ownership, correlates with substandard care.

Since the 1990s, corporate chain ownership has grown steadily and now dominates the market. Today, nonprofits own less than one in four nursing homes, while for-profits control nearly 70 percent. (The remaining five to six percent are government facilities.)

The latest analysis of nursing home ownership comes from Kaiser Health News (KHN), which examined organizations with complex corporate structures that can be used to pad the pockets of owners while protecting them from lawsuits.

Increasingly, KHN explains, owners of nursing homes outsource services to multiple entities in which they also have an ownership interest. For example, buildings are owned by real estate trusts, while the nursing home is leased by a management company. Physical therapy services, pharmacy services, dining, and maintenance can all be outsourced to sister companies.

Nearly three in four nursing homes outsource much of their business to related companies, according to KHN. This includes some nonprofit organizations as well. These structures, when not used to make and hide profits, can be cost efficient, with related companies charging the nursing home less than average for their services. But this is not normally the case.

In an examination of federal inspection, staffing and financial records nationwide, KHN found that nursing homes structured with related entities showed significant shortcomings. Homes with complex corporate structures:

  • employed, on average, 8 percent fewer nurses and aides;
  • averaged 53 validated complaints per 1000 beds, as compared to 32 per 1000 beds in independent homes; and
  • were subject to 22 percent more fines for quality deficiencies, and paid penalties averaging seven percent more than independent homes.

Charlene Harrington, professor emeritus of the School of Nursing at the University of California-San Francisco, who has extensively studied for-profit nursing homes, told KHN, “Almost every single one of these chains is doing the same thing. They’re just pulling money away from staffing.” In numerous studies, staffing has been shown to be a critical variable in quality care delivery.

Complex corporate structures not only undermine care for nursing home residents; they also provide a legal screen for owners, making it difficult for consumers to hold owners accountable.

To bring related companies into a lawsuit, attorneys must persuade judges that all the companies were essentially acting as one entity and that the nursing home could not make its own decisions. Often that requires getting access to internal company documents and emails. Even harder is holding owners personally responsible for the actions of a corporation—known as “piercing the corporate veil.”

Perhaps more importantly, it is time to rethink public policies that favor corporate ownership of nursing homes, as Charlene Harrington argues: “The considerable evidence from observational studies that care delivered in for-profit facilities is inferior to public or nonprofit services supports the need to develop new policies that would favor the development and maintenance of public and nonprofit homes.

St. Louis Today had an editorial about the recent NY Times report on the outsourcing of management and “back office”support services to companies owned and operated by the owners of the nursing home. These business dealings, known as related-party transactions.  In the nursing home industry, however, with its reliance on taxpayer dollars, related-party transactions can also encourage insider dealing, maximizing profits for the outside vendors while siphoning off funds needed for patient care and staffing.

“So the question of who’s profiting from meeting — or not meeting — their needs is a matter of great public import. People’s lives can and do hang in the balance.”

In a remarkable story published Dec. 31, Kaiser Health Newsreported that the owners of nearly three-quarters of the 15,600 nursing homes in the United States buy a wide variety of goods and services from companies in which they have a financial interest or control. Nursing home owners can rent the land to themselves at above-market rates, or own the staffing company that provides nursing care and management.

 Relative to homes that don’t have related-party transactions, Kaiser reported, nursing homes that do deal with related parties have an average of 8 percent fewer aides and nurses on staff and are 9 percent more likely to have injured a resident or put him at risk. They have 35 percent more complaints and are fined 22 percent more frequently by government regulators.

For nursing home owners, a complex web of related-party transactions can offer a shield against lawsuits or governments seeking restitution for Medicaid overpayments.

This is outrageous. America’s vulnerable elderly shouldn’t be a profit center. Government should protect people and tax dollars, not profits.