Axios reported that “the pharmaceutical industry is livid about a surprise change to Medicare drug policy that was slipped into the Senate budget deal. The bill would close the Medicare Part D “donut hole” in 2019, a year earlier than previously scheduled, and force drug companies to shoulder most of the cost.”

 Medicare’s donut hole puts seniors and disabled people on the hook for a large chunk of their prescription costs. It’s supposed to go away in 2020, as part of the Affordable Care Act. Beneficiaries would pay no more than 25% of brand-name drug costs, while health plans would cover 25% and drug companies would cover the remaining 50% through discount payments.

But the Senate bill would end the coverage gap a year earlier, and change the ratios. Drug companies would be responsible for 70% of the costs instead of 50% — a move that would cost drug companies billions of dollars.

The Kokomo Tribune reported that two former owner/operators of nursing homes agreed to plead guilty in a kickback scheme involving millions of dollars.  American Senior Communities CEO James Burkhart and Chief Operating Officer Daniel Benson have reached plea agreements that could put them in prison for decades.

Burkhart and Benson were indicted in 2016 along with Burkhart’s friend, Steven Ganote, and Burkhart’s brother, Joshua Burkhart. Ganote and Joshua Burkhart also have reached plea deals.

Federal prosecutors who indicted the men on a total of 32 counts say they took part in a kickback scheme between January 2009 and September 2015 that netted them $16 million. Prosecutors said the men used shell companies to falsify and inflate costs of goods and services, which enabled them to steal discounts and rebates, and conceal kickbacks during the six-year period.

Prosecutors said the men used the money to buy lavish items, such as vacation homes, jewelry and gold bars.

The company manages nearly 100 senior care facilities, including 60 locations under a contract with Marion County’s public health agency. The county is home to Indianapolis.

In an article from the University of Missouri News Bureau, Sheena Rice details a new federal report which reduced hospitalizations and saved Medicare thousands of dollars per person. Read an excerpt below:

Researchers from the University of Missouri Sinclair School of Nursing are continuing to see success in their work to improve quality of care in nursing homes. In 2016, a federal report found that the Missouri Quality Initiative for Nursing Homes (MOQI) reduced potentially avoidable hospitalizations by 48 percent and reduced hospitalizations from all causes by 33 percent. This reduced total Medicare expenses by $1,376 per person, saving 33 percent of the costs of all-cause hospitalizations and 40 percent of potentially avoidable hospitalizations.

You can read the full report here.

The Clarion Ledger reported the $1.25 million settlement between U.S. Department of Justice and Hyperion for allegations of false Medicare and Medicaid claims for  “grossly substandard care” at a Lumberton nursing home.  The government alleges that from October 2005 to May 2012, Hyperion made claims to Medicare and Medicaid for providing effectively worthless services to the nursing home residents.  The poor quality care caused the facility’s residents to suffer pressure ulcers, falls, dehydration and malnutrition, among other physical, mental and emotional harms, the government says.

Hyperion Foundation, a Georgia not-for-profit entity (Hyperion), Julie Mittleider, Hyperion’s former president, AltaCare Corp., a Georgia corporation engaged in nursing home management, Douglas Mittleider, AltaCare’s chief executive officer,  Long Term Care Services Inc. and Sentry Healthcare Acquirors Inc., and others have agreed to pay the settlement for alleged substandard care to residents at the Oxford Health and Rehabilitation nursing home in Lumberton. The nursing home was operated from late 2005 through mid-2012 by AltaCare, under a contract with Hyperion.

For example, the United States alleges that Hyperion failed to meet the nutritional needs of residents, failed to administer medications to residents as prescribed by their physicians, over-medicated residents, hired insufficient staff to care for them and diverted Medicare and Medicaid funds to other entities affiliated with Douglas or Julie Mittleider, leaving the facility unable to pay for its basic operations, including food, heat, air conditioning, pest control and cleaning. 

“When operators of nursing homes harm our most vulnerable citizens and break the law by defrauding our government for grossly substandard or worthless services, we will bring to bear all the resources of the federal Government in order to rectify these terrible actions,” Southern District of Mississippi U.S. Attorney Mike Hurst said in the news release. “I commend our attorneys and investigators for resolving this travesty with one of the largest healthcare fraud settlements involving a single nursing home. We will continue the Department of Justice’s long-standing commitment to protecting the elderly.”

The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and share in any recovery.  The False Claims Act authorizes the United States to intervene and take over primary responsibility for the action, as it did in this case.  The amount to be recovered by the private whistleblower has not been determined.

U.S. News had an interesting article discussing how Louisiana‘s payments to private nursing homes for taking care of Medicaid patients have risen substantially over the last decade increasing profits even as their occupancy rates stayed flat, according to an audit.  The state Medicaid program spent $8.7 billion in federal and state dollars on nursing home care for people who are elderly or disabled from 2006 through 2016, as daily rates paid to about 260 nursing homes increased 54 percent from $112.34 to $172.82.  In the last budget year that ended June 30, Medicaid payments to the facilities reached $1 billion.  Occupancy rates over the same period, however, “have generally remained the same,” growing by less than 1 percent.

One easy explanation is that the nursing home industry is powerful and a hefty campaign contributor at the state capitol.  In fact, inadequate monitoring and enforcement caused the department to fail to recoup $3.2 million in Medicaid payments for ineligible patients in 2014.

 “Even with the increasing payments to nursing facilities, Louisiana continues to rank poorly in regards to quality of care,” auditors wrote.
 Auditors also said the Louisiana Department of Health needs to improve its oversight of payments to ensure they’re accurate. They said the agency should issue penalties for late cost reports from nursing homes and tougher sanctions for facilities that have repeat audit violations.

The Department of Justice announced four San Diego-area nursing homes owned by Los Angeles-based Brius Management Co. have agreed to pay at least $6.9 million to resolve allegations that their employees paid kickbacks for patient referrals and submitted fraudulent bills to government health care programs. The four nursing homes involved in the settlement are: Point Loma Convalescent Hospital, Brighton Place – San Diego, Brighton Place – Spring Valley, and Amaya Springs Health Care Center in Spring Valley.  The settlement resolves an investigation into allegations that their employees paid kickbacks to discharge planners at Scripps Mercy Hospital San Diego to induce patient referrals to the nursing homes in violation of the federal Anti-Kickback Statute.

“Kickbacks for patient referrals are illegal under federal law because of the corrupting influence on our nation’s healthcare system,” said Acting United States Attorney Sandra R. Brown. “This settlement demonstrates our resolve to combat fraud that compromises the care provided to patients served by a government healthcare plan. This case further shows the power of whistleblowers to shine a light on corrupt activities and obtain significant recoveries on behalf of United States taxpayers.”

The investigation examined additional allegations made in a “whistleblower” lawsuit that the nursing homes submitted false claims to Medicare and Medi-Cal for services provided to patients referred from Scripps Mercy Hospital. Bills submitted for patients referred as a result of illegal kickbacks would constitute fraud against the United States and the State of California.

The settlement resolves a lawsuit brought by a former employee of one of the nursing homes under the qui tam – or whistleblower – provisions of the federal and state False Claims Acts, which allow private citizens to file lawsuits on behalf of the United States and California and share in any recovery. The whistleblower, Viki Bell-Manako, will receive 20 percent of each settlement payment. Pursuant to the settlement, United States District Judge John F. Walter today dismissed the lawsuit, United States of America, State of California ex rel. Bell-Manako v. Brius Management Co., et al., CV11-2036-JFW.

Nursing home employees conspired to pay kickbacks allegedly without the knowledge of Brius Management Co. The nursing homes admitted that their employees used corporate credit cards to pay for gift cards, massages, tickets to sporting events, and a cruise on the Inspiration Hornblower that were given to planners at Scripps Mercy Hospital as kickbacks.

“Skilled nursing facilities that pay kickbacks in order to boost profits will be held accountable for their improper conduct,” said Christian J. Schrank, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General. “We will continue to crack down on kickback arrangements, which can corrupt medical decision-making and undermine the public’s trust in the health care system.”



The Clarion Ledger reported the settlement between the Department of Justice and a Georgia nursing home and its management company for “grossly substandard care”.  Hyperion Foundation, the owner, and AltaCare Corp., the management company, agreed to pay $1.25 million to resolve allegations of Medicare and Medicaid fraud for failing to provide care at Oxford Health and Rehabilitation nursing home.

The poor quality and lack of staff caused serious health issues including pressure ulcers, dehydration, malnutrition, and falls according to the government investigation.  I hope the DOJ continues to investigate the adequacy of the services provided to nursing home residents to increase quality and to rid the industry of the waste, fraud, and abuse that is so common.




KBTX reported that Health Services Management Inc. (HSM) has paid the United States $5 million to resolve claims that the company billed the Medicare and Medicaid programs for worthless services and for services that were never provided.  HSM is based in Murfreesboro, Tennessee, and owns and operates nursing homes throughout the United States.

The whistleblower worked at Huntsville Health Care Center, a 92-bed nursing home and rehabilitation facility that HSM owned and operated.  She claimed that during her employment, she witnessed patient abuse and neglect, inadequate care, physical and verbal abuse and denial of basic services, such as providing patients with food and water.

The investigation concluded that from Jan. 1, 2013, through Dec. 31, 2015, Huntsville Health Care Center billed for services that were not provided or which were so substandard and deficient that they were considered worthless and potentially harmful to specific Huntsville patients.

“We take seriously the care of our most vulnerable citizens, the elderly and infirm,” said Martinez. “When providers accept federal funds for reimbursement, they have a duty and responsibility to provide the best care possible to the patient, especially when those patients are elderly and at times incapacitated. The United States Attorney’s Office (USAO) for the Southern District of Texas will aggressively hold those accountable who fail to provide the care that is expected when the failure to do so results in harm to the patients and the treasury.”

“It’s disturbing when a nursing home company accepts Medicare and Medicaid money to care for vulnerable nursing home residents and in return provides substandard care, as alleged in this case,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services – Office of Inspector General (DHHS-OIG). “We will continue to hold nursing homes accountable to give residents the quality health services, and living conditions, taxpayers pay them to provide.”

The Santa Fe New Mexican reported that Casa Real nursing home in Santa Fe owned and operated by Preferred Care Partners Management Group has at least temporarily improved persistent quality-of-care problems enough to resume billing Medicare and Medicaid for newly admitted residents.  Casa Real is one of only two homes in Santa Fe that accept Medicare and Medicaid patients.

For more than two months, Casa Real had been barred from charging Medicare or Medicaid for new residents after the Centers for Medicare and Medicaid Services found the nursing home wasn’t in compliance with federal care standards.

Inspections this year turned up a long list of problems, including medication errors, expired food and drugs on shelves, unreported resident injuries and assault, poor care of bed sores, nursing understaffing and inadequate safeguards against the spread of dangerous infections.

The former director of nursing at Casa Real from May to August has accused management of forging patient records in an attempt to show the facility was in compliance with care standards dealing with monitoring of medication effects on residents.  Of course, she was soon fired.

The August inspection found residents weren’t receiving medications as directed by their physicians and that the nursing home wasn’t doing enough to ensure that residents didn’t receive unnecessary drugs, including psychotropic medications.

The federal agency in May designated Casa Real as a “special focus facility” because of its poor record of complying with care standards, and it said the nursing home would be subject to more frequent inspections. The designation is given to the nation’s poorest-performing nursing homes and is meant to address the “yo-yo” problem of facilities routinely falling in and out of compliance with care standards.

The state Attorney General’s Office is suing Preferred Care, alleging it has defrauded Medicaid by having insufficient staff to meet the needs of residents at its Santa Fe nursing homes, as well as its facilities in five other New Mexico communities. Preferred Care has denied the allegations.

The Hill had an article on the False Claims Act.  The FCA authorizes private individuals to sue anyone they think is defrauding the federal government. Individuals filed more than 4,700 FCA actions between 2009 and June 2016. The Act provides for treble damages. The spoils are divided among the person alleging the fraud, his attorneys, and the federal government. In 2014, the Department of Justice reported that FCA “recoveries” totaled $5.79 billion. Health care lawsuits accounted for $2.3 billion of that.

The federal government must investigate the claims in every FCA case. The initial investigation is done under seal. Defendants may be investigated for years, but not know about it until their business documents are subpoenaed. The individual alleging fraud can proceed with a case even if the government decides against it.

Increasingly sophisticated groups of attorneys choose to continue. They sue any entity that receives federal payments, claiming that the failure to comply with administrative standards constitutes fraud. At the time the act was passed, the goal was to prosecute fraud cases in which a contractor billed the United States for nonexistent or worthless goods or services.