The Santa Fe New Mexican reported on the ongoing litigation saga related to bankruptcy of Preferred Care Inc. of Plano, Texas.  New Mexico’s Attorney General filed a lawsuit four years ago alleging inadequate care of residents at nursing homes in Santa Fe and 10 other New Mexico communities.  The lawsuit alleges the operators received hundreds of millions of dollars from Medicare, Medicaid and private-pay residents without providing basic care.

However, justice may not occur because the operators of the nursing homes — all affiliated with Preferred Care Inc. of Plano, Texas — filed for bankruptcy last year. Preferred Care, whose affiliated companies operated nursing homes in 12 states, also declared bankruptcy.  While the bankruptcies are pending, the Attorney General’s Office is barred from proceeding with its case against the New Mexico nursing home operators and Preferred Care.

Attorney General Hector Balderas said he is frustrated that the lawsuit against Preferred Care and its affiliated nursing home operators has been “disrupted and delayed by companies that have attempted to escape without paying their fair share to New Mexicans and prevented swift trials in New Mexico.”

Vulnerable populations should never be reliant on providers that cannot immediately pay damages for the harms they have caused,” Balderas said in written statement.

While the lawsuit by the Attorney General’s Office has stalled, the Preferred Care operators are moving to close or transfer the New Mexico homes to new management. A company called 1650 Galisteo Street Operations, a subsidiary of Genesis HealthCare, on Nov. 1 took over the long-troubled Casa Real nursing home in Santa Fe. Genesis is one of the nation’s largest nursing home chains.

Genesis HealthCare, whose subsidiary took over Casa Real, is a Pennsylvania holding company with more than $5 billion in annual revenues. Its subsidiaries operate more than 400 skilled-nursing facilities and assisted/senior living communities in 30 states. Genesis early this year restructured its finances to avoid a possible bankruptcy filing.

WFSB in Connecticut reported the assault and strangulation death of a resident as a result of the nursing home’s failure to supervise a resident with dementia and post-traumatic stress disorder.  The 81-year-old male resident is being charged with murder after he allegedly strangled a 76-year-old woman at Autumn Lake Healthcare nursing home facility. The victim was identified as Patricia Way.

Waterbury were called to the Autumn Lake Healthcare at Bucks Hill around 6 p.m. on Saturday for the report of an assault.  Staffers rushed to Jensen’s room when they heard his roommate calling for help. A supervisor who rushed to the room told police he found Way in her wheelchair, with Jensen standing behind her with her scarf wrapped around his hands.

The court documents say, “Asked him what he was doing and he told her not to worry about it. John stated that he then wrapped the scarf around (her) neck and held her up wit the intent to strangle the life out of her. He continued to strangle (her) until he felt the life leave her body.”

Staffers pushed Jensen away and started CPR.

Police arrested John Jensen for ‘a number of charges,’ police said including strangulation and criminal attempt at murder. His charges were upgraded to murder during a court appearance Monday morning.

According to court documents, Jensen and Way would often do things together and was described by some at the nursing home as a “couple”.  When interviewed by police, Jensen told them the two were in a relationship, but had gotten into an argument earlier in the day and that he began thinking about how to kill her.

“Obviously there were witnesses available on site. Jensen was brought back to police headquarters where an interview was conducted and he made some admissions,” said Chief Fernando Spagnolo, Waterbury Police Department.

According to the bail commissioner, Jensen has a criminal record that dates back more than 50 years, including a federal conviction for an armed bank robbery back in 1966, up to a DUI arrest in 1999.


Six veterans’ groups are demanding the Department of Veterans Affairs improve the quality of care at its nursing homes following a story by USA TODAY and The Boston Globe detailing “blatant disregard for veteran safety” at a VA nursing home in Massachusetts. Veterans of Foreign Wars, Disabled American Veterans, Paralyzed Veterans of America and Vietnam Veterans of America joined AmVets and the Legion in calling for action. Together, the groups are known as the “big six” and wield considerable clout in Washington. The groups, who together represent nearly 5 million members, said veterans who risked their lives for our country shouldn’t have to risk their lives in VA nursing homes. The story was the latest in an investigation by USA TODAY and the Globe that revealed care at many VA nursing facilities was worse than at private nursing homes in the agency’s own internal ratings, kept secret from veterans for years.

Anybody who respects veterans should be angered by this,” American Legion National Commander Brett Reistad said. “America’s veterans deserve better.”

In Brockton, Massachusetts, investigators found two nurses asleep during their shifts, even though the facility knew it was under scrutiny and inspectors were coming to visit, looking for potential signs of patient neglect. A whistleblower had reported that nurses and aides did not empty the bedside urinals of frail veterans, they failed to provide clean water at night and didn’t check on the veterans regularly.

 “The stories being reported about the treatment of some individual veterans at these facilities are nothing short of horrifying,” said Rege Riley, national commander of American Veterans, known as AmVets. He called on VA Secretary Robert Wilkie to “take swift and transparent action to fix this.”

The Washington Post had a great article on HCR ManorCare, a national for-profit chain of nursing homes.  As with most national for-profit chains, profits are a bigger priority than providing the necessary care.  Signs of neglect include pressure ulcers, weight loss, increased falls, inadequate personal hygiene–all caused by the short-staffing to save money. Bedsores occur at nursing homes because there are not enough people to move residents who are confined to their beds, according to experts; the falls happen because there is a lack of staff to answer bells to help people get to the bathroom; and infections spread when aides forget to wash hands.

Almost all of these issues relate to staffing — either not enough people or not enough training,” said Charlene Harrington, a nurse and professor at the University of California at San Francisco, who has studied nursing homes for years. “That’s why this is so frustrating. It’s just basic hands-on care.”

In terms of nurse staffing hours per patient, HCR ManorCare scored 10 percent or more below the national average. The staffing scores, which include registered nurses, licensed practical nurses and nurse aides, are adjusted by Medicare to reflect the varying needs of patients at each home. At HCR ManorCare, the staffing score changed little during the years leading up to the bankruptcy.

In recent years, private-equity firms have moved into businesses serving some of the nation’s poorest or most vulnerable people. The firms profit by pooling money from investors, borrowing even more, and then using that money to buy, revamp and sell off companies. Their methods are geared toward generating returns for investors within a matter of years, and this has led to criticism that they merely plunder company assets while neglecting employees and customers.

The lack of care had devastating consequences including the preventable and wrongful death of hundreds of residents since the chain was under the ownership of the Carlyle Group, one of the richest private-equity firms in the world.  The diversion of funds caused ManorCare nursing-home chain to struggle financially until it filed for bankruptcy in March. During the five years preceding the bankruptcy, the second-largest nursing-home chain in the United States exposed its roughly 25,000 patients to increasing health risks, according to inspection records analyzed by The Washington Post.

The number of health-code violations found at the chain each year rose 26 percent between 2013 and 2017, according to a Post review of 230 of the chain’s retirement homes. Over that period, the yearly number of health-code violations at company nursing homes rose from 1,584 to almost 2,000. The number of citations increased for, among other things, neither preventing nor treating bed sores; medication errors; not providing proper care for people who need special services such as injections, colostomies and prostheses; and not assisting patients with eating and personal hygiene.

Counting only the more serious violations, those categorized as “potential for more than minimal harm,” “immediate jeopardy” and “actual harm,” The Post found the number of HCR ManorCare violations rose 29 percent in the years before the bankruptcy filing.

The rise in health-code violations at the chain began after Carlyle and investors completed a 2011 financial deal that extracted $1.3 billion from the company for investors but also saddled the chain with what proved to be untenable financial obligations, according to interviews and financial documents. Under the terms of the deal, HCR ManorCare sold nearly all of the real estate in its nursing-home empire and then agreed to pay rent to the new owners.

Shortly after the maneuver, the company announced hundreds of layoffs. Some nursing homes were not making enough to pay rent. Over the next several years, cost-cutting programs followed, according to financial statements obtained by The Post.

The origins of the HCR ManorCare deal go back to 2007, when Carlyle solicited investors for money for a new investment fund. More than 300 investors, mostly pension funds, investment companies and big corporations put up money. Carlyle raised $13.7 billion, with Carlyle agreeing to put up $700 million, or about 5 percent of the pool, according to the agreement between Carlyle and investors. The fund, called Carlyle Partners V, then purchased an array of companies — a Canadian distributor of construction products, a Chinese shipping company and a U.S. aerospace company were among them. In December 2007, it bought HCR ManorCare for $6.1 billion plus fees and expenses. Most of the purchase price was borrowed money — about $4.8 billion — and Carlyle put up $1.3 billion.

The deal immediately faced protests from critics who said the aggressive financial tactics of private-equity firms are ill-suited for companies caring for some of society’s most vulnerable.  To put together a financial picture of HCR ManorCare, The Post obtained financial statements for the company for 2009 through 2016, as well as the agreement between Carlyle and its co-investors. Other data came from ManorCare’s bankruptcy filings and public-records requests to authorities in Florida, Wisconsin and California.

From the start, Carlyle’s acquisition of HCR ManorCare made the company’s finances more risky because the purchase burdened it with billions in long-term debt. But in April 2011, Carlyle made another critical move at HCR ManorCare, one that would enrich investors and imperil the financial footing of the chain.

Carlyle took HCR ManorCare’s vast real estate empire — the hundreds of nursing homes and assisted living facilities as well as the land underneath — and sold it to HCP, a real estate investment company. HCR ManorCare then had to pay rent to HCP for the use of the nursing homes.  This kind of deal, known as a sale-leaseback, is a common tactic of private-equity firms, and it generated financial benefits for Carlyle and its investors. Carlyle got $6.1 billion from the sale, an amount that roughly matched the price that the private-equity firm had paid to buy the company just four years prior.  Crucially for Carlyle and its investors, the deal allowed them to recover the $1.3 billion in equity they put into the deal.

Carlyle made money from its investment in other ways, too. It took at least $80 million from the HCR ManorCare venture in the form of various fees, according to interviews and financial documents.

Most of that was a “transaction fee,” which is money Carlyle receives when it buys a company, typically 1 percent of the purchase. The $6.1 billion ManorCare purchase yielded Carlyle $61 million, Carlyle officials confirmed. That money was distributed to Carlyle and its investors.

In addition, Carlyle receives annual “advisory fees” from the companies that it purchases — essentially, Carlyle pays itself to manage the companies it owns. At ManorCare, those fees averaged about $3 million a year from 2007 to 2015, or about $27 million, according to documents and interviews. That money was also distributed to Carlyle and its investors.

Finally, there was one other person who made a lot of money despite the company’s financial woes. After the bankruptcy, longtime chief executive Paul Ormond was awarded $117 million under a deferred compensation agreement. While the HCR ManorCare sale-leaseback benefited Carlyle and its investors, the chain could no longer pay its bills.

The rent HCR ManorCare was obliged to pay — to occupy the nursing homes it had once owned — amounted to $472 million annually, according to legal filings. The rent was set to escalate at 3.5 percent a year, and according to the lease, HCR ManorCare also had to pay for property taxes, insurance and upkeep at the homes.

Required to explain the bankruptcy in court filings, HCR ManorCare began its narrative with the sale-leaseback deal. The rental price had been negotiated when the business environment for nursing homes was “favorable,” the company disclosed in the court filing. But then the environment became “significantly more challenging.”

After the sale-leaseback, the onset of financial troubles was sudden.  The chain never again recorded an annual profit, according to financial statements. By the next year, the nursing homes could not afford their lease. An HCR ManorCare expert reported in a recent court filing that by 2012 the net cash flows at the nursing homes in some months were “insufficient . . . to make the required rent payments.”

Executives began to cut costs. By 2012, HCR ManorCare had instituted a “cost reduction program” according to a financial statement of HCP, its new landlord. Between 2010 and 2014, the amount that HCR ManorCare spent to keep the company’s facilities going — operations — fell by 6 percent, after accounting for inflation, according to company financial statements that include its nursing homes, assisted living facilities and other businesses. Operating expenses continued to fall after that, too, but that was partly because the company was reducing the number of nursing homes it operated.  Then, during “significant” losses from 2014 through 2016, HCR ManorCare management “instituted measures to control expenses and conserve cash,” according to an HCR ManorCare financial statement.

Several nurses who worked at the ManorCare facility and at others nearby said they thought there was often too few people working. Some said they noticed the problems got worse about 2012.

“They always worked short-staffed,” said Diane Bridges, a nursing assistant who worked there in 2015. “There were two CNAs [certified nursing assistants] for over 30 people. The workload was very heavy. There were not enough girls to get the residents up, get them out of bed in the morning.”

“It was a very good place to work — and then it wasn’t,” said a nurse’s aide who left in 2013 after more than a decade there. “They just didn’t seem to have the money. The Hoyer lifts [equipment for moving patients] started breaking down and it was hard to get them fixed. They switched to cheaper supplies. Residents started complaining.”

“I felt bad because we were supposed to get to these room bells in a certain amount of time, but we couldn’t — there weren’t enough people,” said Kiesha Miller, a nursing assistant who worked at the ManorCare in Allentown, Pa., from 2009 to 2012. “All I could do was say, ‘I’m sorry we’re doing the best we can,’ because management would tell us not to say we’re short-staffed. And when we complained, management would say we can’t afford to have that many people on staff. And I thought, ‘This is just wrong.’ ”

“The short-staffing was to the extent that it was very dangerous for the residents,” said Lisa Kay Wasnowic, who worked off and on at the Allentown ManorCare from 2004 to 2014. “At times, it was just one aide for 60 patients. And it just kept on getting worse.”

The New York Law Journal had an interesting article written by Kimberly Kalmanson, the principal attorney of Kalmanson Law Office. The article mentions that the New York State (NYS) legislature amended the NYS Human Rights Law earlier this year to strengthen protections for employees who allege claims of sexual harassment and attendant discrimination. The amendment prohibits employers from forcing victims to arbitrate their claims. Nevertheless, while the new NYS law invalidates mandatory arbitration provisions in employment agreements that include discrimination claims and also provides that non-disclosure agreements in discrimination settlements are invalid unless they are requested by the employee, it is not without controversy.

These laws will be challenged as pre-empted by the Federal Arbitration Act (FAA).  Of course, Congress could act to amend the FAA to exclude matters of sexual harassment from its reach. The use of what effectively constitutes forced arbitration undercuts the entire spirit and policy underlying ADR.

Of course, arbitration does constitute a waiver of due process—arbitrators are not required to follow the law or the rules of evidence. The decision of the arbitrator is final and binding with little ability to appeal or overturn an arbitrator’s decision.

“It is not uncommon for parties to an arbitration to engage in malfeasance or miss deadlines without consequence, and for the other side to be left with little avenue for relief. It is easy to find oneself between the proverbial rock and a hard place; anger the arbitrator by asking for penalties he or she may not be wont to impose, or go to court for relief and risk being countersued for violating the confidentiality or non-disparagement provisions of the underlying contract.”

“Those in favor of mandatory arbitration provisions will no doubt argue that no party is forced to arbitrate, but rather, that it is a function of contract. Technically, that is true, but that argument assumes that employees are able to engage in arms’-length transactions with their prospective employers.”

The contracts are contracts of adhesion. This is not an arms’-length relationship. “ADR is an excellent avenue to elect when both parties truly elect it. Arbitrators handling matters as a function of unequal bargaining power ought to be vigilant in policing employers who may not take the matter as seriously as they would had the case proceeded in traditional litigation. Congress should consider the will of the States and carve out an exception in the FAA to ensure that victims are not further victimized without access to their day in court with the full light of day.”

The family of a 94-year-old woman who was raped at Brookdale Senior Living nursing home is planning to sue the facility, saying a lack of security is to blame.  The assault happened as the resident was getting out of bed, the police report states.

“She was attacked from behind. A male in scrubs who threw her on to the bed and proceeded to rape her and sodomize her,” said Tom Edwards, the family’s attorney.

According to the police report, the rape happened last April.  More people have been reportedly assaulted at the facility since then. No arrests have been made.

The report says the man took off when a nurse heard Jane screaming. She was taken to the hospital, where it was determined she was sexually assaulted.

Based on DNA tests, the attorney does not believe she was attacked by a staff member. Police reports confirm other attacks have been reported at the facility in 2018.

“Since this rape, there has been an additional rape on the same hallway,” Edwards said. “A man tried to rape another patient. The patient, fortunately, was not raped. They were able to pull an emergency cord in the room and that man fled.”


Champaign County is ready to settle a pair of lawsuits brought by families of nursing home residents who died from neglect.  The county board agenda lists settlements with the estates of Caroline Scalzo and Sonya Kington.

Ms. Kington, 78, an Alzheimer’s patient, was found dead in a hot courtyard on June 10, 2017. Four months later, the Illinois Department of Public Health fined the nursing home $25,000 in connection with her death, finding that it “failed to ensure the door alarm to the courtyard on the facility’s Alzheimer’s Unit was engaged and the door not propped open.”

The attorney for Kington’s estate said that settlement will be for “the insurance policy limits of $1 million.”


The trial of Megan Schnipke has been ongoing.  Schnipke is the nursing home caregiver that is accused of falsifying records and neglecting a resident who died of hypothermia.  Schnipke is accused of falsely charting that Hilty Memorial Nursing Home resident Phyllis Campbell was in her room on Jan. 7. Campbell had actually gotten out of bed unassisted and wandered into the nursing homes’ courtyard. Campbell was wearing a monitoring bracelet at the time, but it was improperly placed around her ankle. Alerts never sounded after her elopement, according to police records.  She was later found dead.

A  jury is deciding whether Schnipke, who was a licensed practical nurse, should be charged with forgery, gross patient neglect and patient neglect. Two nursing aides were indicted in Campbell’s death in May. In September, both received five years of probation, 60 days in county jail and 100 hours of community service. Destini Fenbert, 20, and Rachel Friesel, 37, both plead guilty to charges of forgery and gross patient neglect. The state dismissed felony charges against them for involuntary manslaughter.

Testimony presented to jurors centered around systemic failures of the nursing home to provide adequate safeguards for its residents, thereby contributing to the death of Phyllis Campbell, the resident who found her way outside the home on a frigid morning early this year and subsequently froze to death.  The facility was aware that Campbell needed supervision because she had managed to find her way outside the nursing home at least twice before but had been discovered by staffers before any harm.

Prosecutors called a dozen witnesses to the stand — the majority of them current or former nursing staff employees at the home. Two of those have already been convicted of lying about events on the night of Jan. 7 and for falsifying records.  Campbell was left alone for some 20 minutes on the morning of her death, despite an official care plan that required her to be supervised constantly by staff members at Hilty Memorial Home.

Asked by defense attorney Bob Grzybowksi if Schnipke “appeared to be doing her duty” as shift supervisor that evening, Friesel said the defendant was furniture shopping “on an Ikea website” for an unknown period of time that evening.

Maria Richardson, a second-shift LPN at the nursing home, testified it is common practice for doors leading from the Alzheimer’s unit at Hilty Home into a common area to remain at night to allow staff members to better track patients’ movements. She said Campbell “was supposed to be supervised all the time when the doors were open.”

All of the employees or former employees of Hilty Home who were present on the morning of Jan. 7 testified they heard no alarms come from inside the home that morning that would indicate a resident had attempted to leave the facility.

William Nagy, an investigator with the Ohio Department of Health, said Hilty Memorial Home had been found in non-compliance with Medicaid and Medicare regulations and “did not provide residents with a safe environment and did not follow through with all necessary interventions” in place to protect the safety of Phyllis Campbell. He said the home could face monetary penalties as a result.


Healthcare Analytic News reported on a new study published by the Health Information Science and Systems journal that may lead to billion dollar savings in Medicare reimbursement.  Machine learning may become a useful tool in discovering Medicare fraud reclaiming anywhere from $19 billion to $65 billion lost to fraud each year.

Researchers from Florida Atlantic University’s College of Engineering and Computer Science used Medicare Part B data, machine learning and advanced analytics to automate fraud detection. They tested six different machine learners on balanced and imbalanced data sets, ultimately finding the RF100 random forest algorithm to be most effective at identifying possible instances of fraud. They also found that imbalanced data sets are more preferable than balanced data sets when scanning for fraud.

“There are so many intricacies involved in determining what is fraud and what is not fraud, such as clerical error,” Richard A. Bauder, senior author and a Ph.D. student at the school, said. “Our goal is to enable machine learners to cull through all of this data and flag anything suspicious. Then we can alert investigators and auditors, who will only have to focus on 50 cases instead of 500 cases or more.”

In the study, Bauder and colleagues examined Medicare Part B data from 2012 to 2015, which held 37 million cases, for instances such as patient abuse, neglect and billing for medical services that never occurred. The team narrowed the data set to 3.7 million cases, a number that would still represent a challenge for human investigators who are typically charged with pinpointing Medicare fraud.

The authors used the National Provider Identifier — a unique ID number issued by the government to healthcare providers — to match fraud labels to Medicare Part B data, which comprised provider details, payment and charge information, procedure codes, total procedures performed and medical specialty.

When researchers matched the NPI to the Medicare data, they flagged potentially fraudulent providers in a separate database. “If we can predict a physician’s specialty accurately based on our statistical analyses, then we could potentially find unusual physician behaviors and flag these as possible fraud for further investigation,” Taghi M. Khoshgoftaar, Ph.D., co-author and a professor at the school, said.

Surprisingly, researchers found that keeping the data set 90 percent normal and 10 percent fraudulent was the “sweet spot” for machine-learning algorithms tasked with identifying Medicare fraud. They thought the ratio would need to include more fraudulent providers for the learners to be effective.