SavaSeniorCare is one the biggest and most profitable nursing home chains in the U.S owned and operated by entities controlled by New York tycoons Murray Forman and Leonard Grunstein.  Last week, a jury in Colorado punished the billion dollar chain with a verdict of $3.7 million. $3.5 million in punitive damages against Belmont Lodge Health Care Center and $200,000 to be awarded to Margaret Smith for her pain and suffering.
See articles at KOAA, The Denver Channel, and KRDO.

Sava run Belmont Lodge Health Care Center in Pueblo caused the wrongful death of 88-year-old Janet Smith in May 2011.  Smith served as a nurse in World War II and the Korean War.  Denver-based attorney Jordan Levine represented Smith’s daughter, Margaret, who sued after her mother’s condition rapidly deteriorated resulting in her death shortly after entering Belmont Lodge for rehabilitation of two broken ankles in April 2011. As a result, she was outfitted with a foley catheter so that she could urinate.  Defendants’ reckless conduct and neglect related to the monitoring and care for that catheter by Belmont Lodge staff led to a severe urinary tract infection, resulting in Janet’s death.

 

 

 

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The Times News reported the closing of Sava owned and operated Brian Center of Weber City with an extensive history of compliance problems after the federal government finally took action to terminate its ability to accept Medicaid and Medicare reimbursements.  The facility is now known as Continium Care of Weber City.

“According to a nursing home license application filed with the Virginia Department of Health Office of Licensure and Certification in October 2010, the facility is managed by Continium Health Care Management LLC located at 10800 Biscayne Blvd., Suite 810, Miami, Fla. The LLC’s president/chairman is listed as Avi Klein of Miami.”  Klein’s partners include Abraham Shaulson, Murray Forman, and Leonard Grunstein.  I’m sure they bled the facility dry before closing the facility down.  In October 2010, the facility, which was then known as the Brian Center, was investigated by the Internal Revenue Service for possible violations of wire fraud, mail fraud, health care fraud and money laundering.

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From J. M. Reinan’s Blog:

On Tuesday, November 8, 2011, a division of the Colorado Court of Appeals heard arguments from counsel on SavaSeniorCare’s appeal of the verdict entered against it in Reigel v. SavaSeniorCare et al. An Adams County jury entered a verdict against SavaSeniorCare’s Thornton nursing and rehabilitation facility, Alpine Living Center, in the amount of $450,000.00 stemming from the death of Dennis Reigel, a former resident of Alpine, as well as for the extreme and outrageous conduct that facility displayed toward his wife.

The primary issue argued on appeal was whether the trial court erred in instructing the jury on what is known as the Loss of a Chance Doctrine. SavaSeniorCare argued, in essence, that there should be no way for a patient’s family to prevail against the nursing home if the nursing home resident simply lost a chance for treatment due to the nursing home’s failure or refusal to timely transfer the resident to a hospital. In the Reigel case, Dennis Reigel, 66, suffered a heart attack at Alpine. His wife repeatedly asked for medical attention and requested that her husband be transferred to a hospital, but was told that Dennis was fine and was made to feel that she was overreacting. When Dennis was finally transferred to the hospital, he was in critical condition and the window of time for performing a life-saving angioplasty had lapsed. The hospital records reflect that his heart attack had occurred some 24-48 hours earlier.

The jury was given both the Loss of a Chance instruction and the stock jury instruction for medical causation (i.e., the facility’s negligence must have been a cause of the wrongful death). The Law Offices of J.M. Reinan argued that the Loss of a Chance Doctrine is the law in Colorado and even if that instruction is determined to have been given in error, such error was harmless because the jury also received the stock causation instruction.

The Court of Appeals is expected to rule on this and the other issues before it within the next few months.
 

A Michigan jury in Macomb County compensated the family of a resident $2.35 million after he
died from choking on a meatball in a Sava nursing home. After an eight day trial and careful
deliberations, the jury concluded that Sava Senior Care Inc., which owned and operated Nightingale Nursing Center, was negligent and caused the death of Walter Polomski, 56, who choked on a golf ball-sized meatball and died after going 15 to 30 minutes gasping for oxygen.  Sava is owned by Murray Forman who also owns and operates the Fundamental Long Term Care Holdings chain of nursing homes.

Sava claimed their subsidiary, SSC Warren Woods Operating, the name on the license, should be
the only Sava entity responsible.  The family’s attorney, John Perrin, said “People need to know that the name on the building isn’t always the company that’s operating the facility,” Perrin said. “There are a lot of shell companies.  Because the real owners don’t put their name on the building, they don’t provide good care.”

Walter Polomski died March 23, 2008, four hours after a meatball got stuck in his trachea
instead of going down his esophagus about 11:35 a.m. at lunch. Polomski never should have had
been given the meatball because he had swallowing problems with doctor’s order for altered
foods. The sole nursing home staffer in the dining room didn’t know the Heimlich maneuver and
instead wheeled him 40 feet or more to a nurse’s station. Another nurse unsuccessfully
performed the Heimlich maneuver on Polomski in the wheelchair then placed him on the ground.
Then another poorly trained nurse tried to force air into his lungs with an “ambu bag,” which
exacerbated the problem. The nursing home failed to call 911 for at least 12 minutes, or properly
staff the dining room, where there should have been at least five staffers. EMS arrived quickly,
and a paramedic removed the meatball with forceps. Polomski died at the hospital on Easter Sunday.

The jury awarded $1.5 million for Polomski’s pain and suffering, $750,000 for the family’s past
“loss of society and companionship” and $100,000 for future loss of companionship. Two jurors
said they agreed Sava was negligent but disagreed with the amount awarded.

The victim’s brother, Richard Polomski was emotional following the verdict.  “I’m ecstatic because my brother’s story was told and I got to find out what exactly happened to him,” Polomski said. “The nursing home was not telling me what EMS was telling me. That’s what prompted me to file a lawsuit.”

Defendants tried to ignore their responsibility by claiming that Polomski’s life expectancy was
only about four to 10 years.

The Wall Street Journal had a recent article on the litigation between Reuben Schron and Murray Forman and Leonard Grunstein, the owner/operator of hundreds of nursing homes under SavaSeniorCare and Fundamental.  Lakewood Voice’s and MultiFamilyInvestor had articles based on the Wall Street Journal article.

Real-estate mogul Rubin Schron is fighting his former lawyer for control of a national nursing-home company in a battle that pits one of the city’s largest and most secretive landlords against an attorney who was a trusted adviser and business partner for years.  The fight involves SavaSeniorCare, an Atlanta-based nursing-home chain with 18,000 patients and 20,000 employees that Mr. Schron says he has the right to buy for $100 million—far less than what it’s worth—from his former lawyer, Leonard Grunstein, and banker, Murray Forman.

But the rift between Messrs. Schron and Grunstein runs deeper. Mr. Grunstein first represented Mr. Schron in the 1980s. Today the two sides can’t even seem to agree on whether they used to be friends.  Mr. Schron in court filings has said that their relationship ruptured after he realized that Mr. Grunstein’s interests in their real-estate deals were running counter to his own. Mr. Grunstein says he arranged some of Mr. Schron’s most lucrative acquisitions and that his former client is now trying to take a bigger piece of the pie than he’s entitled to.

The deal for the nursing-home chain was funded by Mr. Schron and devised by Messrs. Grunstein and Forman, according to court filings by both sides. Like other buyouts of big nursing home companies in the mid-2000s, the deal essentially split the chain, a publicly traded company called Mariner Health Care, into two pieces: one operated the facilities and paid rent to the other, which owned the real estate.

Mr. Schron owned the real estate company; Messrs. Grunstein and Forman eventually took control of the operating company, Sava, which paid rent to Mr. Schron for the right to operate those homes.  Mr. Schron claims in his complaint that the deal gave him the option to buy the operating company for $100 million.   Mr. Grunstein later told him the option was worthless and that he could use it “as toilet paper.”

Complicating the case is the tangled relationship between Mr. Schron and Mr. Grunstein, a partner in the New York office of Troutman Sanders LLP who has been on leave from the Atlanta-based law firm since last year. Troutman has filed claims in court for $1.5 million in attorneys’ fees it says are owed to the firm by Mr. Schron. Mr. Schron, in his complaint, said that many of the Troutman invoices are bogus.

Mr. Grunstein’s side says that the nursing-home deal, which the lawyer helped devise, enriched Mr. Schron to the tune of hundreds of millions of dollars, mostly from taxpayers via Medicare and Medicaid.

The spokesman also said that Mr. Schron demanded a rent increase that Messrs. Grunstein and Forman rejected because it would have affected patient care.  The money siphoned away from the nursing homes already affect patient care in short staffing and poor supplies.

 

 

Congratulations to Tom Rhodes and Beth Janicek, who received a $592,439 jury verdict after a 6 day trial against SavaSeniorCare and related entities represented by Lori Proctor (national trial counsel for SSC/SAVA).   Unfortunately, because of arbitrary limits imposed in Texas, the family will not be adequately compensated and will recieve a fraction of the amount the jury awarded.   The case involved a 76 year old nursing home resident who was neglected and developed avoidable bilateral decubitus ulcers on his hips which became infected.

 

The following article appeared in the San Antonio Express-News today regarding the verdict:

 

After more than a day of deliberation, a civil jury found a San Antonio nursing home negligent Wednesday in its care of a now-deceased resident who developed severe, infected bedsores.

Jurors ordered Retama Manor Nursing Center to pay the estate of Emilio Gonzalez $250,000 for his physical pain and suffering, $150,000 for mental pain and anguish and $192,439.88 in medical bills. But the nearly $600,000 verdict is expected to be reduced substantially after state District Judge Victor Negrón applies Texas tort reform caps that have been in place since 2003. Under Texas law, Gonzalez’s family is likely to receive $250,000 in damages and $75,000 in medical expenses to be paid to Medicare.

Mary Koenig, who filed the suit on behalf of her father, said she hopes the judgment sends nursing homes a message. “We wanted to make some changes in my dad’s name,” she said. “We just didn’t want him to be another statistic. We needed to bring attention to the problems that are out there.”

Gonzalez was a resident at Retama Manor from 2001 until months before his death in 2007 at the age of 76.

In closing arguments Tuesday, plaintiffs attorneys Tom Rhodes and Beth Janicek said the nursing home was intentionally understaffed in order to make more money, often leaving nurses with up to 60 residents to oversee at a time.

By the time Gonzalez was taken to Southwest General Hospital in August 2007, two bedsores had rotted to the bone, requiring an extended stay at a hospital specializing in wound treatment, they said.

Attorney Lori Proctor, who represented the nursing home, pointed out that Gonzalez’s bedsores had always healed before in the six years he spent at the nursing home. The difference this time, she said, was that he had recently been diagnosed with terminal lung cancer that was making it impossible for him to heal.

 

 

The Times-News had an article about the IRS investigation in to the financial shenanigans at Brian Center Health and Rehabilitation in Weber City.  Brain Center is part of the old Mariner and now SavaSeniorCare chain of facilities who have had a history of questionable financial relationships with related companies and siphoning of funds away from facilities to line their own pockets.

Authorities confirmed that Internal Revenue Service agents paid a visit to a Brain Center in Scott County. IRS Special Agent Patrick Brown said that agents with the IRS Criminal Investigations Unit were at the Brian Center Health and Rehabilitation, 105 Clonce St., Weber City, on official business.  I don’t understand why the IRS can’t provide more information about the allegations especially if it involves taxpayer money.

Federal documents pertaining to the case are currently sealed, according to the U.S. District Court Clerk’s Office in Abandon.  Eye witnesses said approximately 25 federal authorities spent almost 8 hours at the center. The witnesses said the agents searched the center’s business offices before loading boxes of documents into three vans.

 

Congratulations to Jay Reinan who recieved a verdict and an Order allowing for punitive damages against SavaSeniorCare et al.  The case is Reigel v. SavaSeniorCare L.L.C and related companies.

On the claim of wrongful death, the jury awarded Plaintiff $75,000.00 in compensatory losses and $150,000.00 in punitive damages, for a total wrongful death verdict of $225,000.00. After reducing the punitive damages to the amount of the compensatory damages pursuant to the Court’s Order of June 16, 2010, the total wrongful death award is $150,000.00.  Total interest on the wrongful death claim is $51,151.71. The total judgment on the wrongful death claim is $201,151.71.

As to the extreme and outrageous conduct claim, the jury awarded $125,000.00 in compensatory damages and $100,000.00 in punitive damages.  Three years, four months and 24 days of pre-judgment interest on $225,000.00 at 9.0% per annum, compounded annually equals $76,727.56. The total judgment on the extreme and outrageous conduct claim is $301,727.56.

Total judgment in favor of the Plaintiff and against all Defendants shall enter in the amount of $502,879.26.

The West Virginia Record had an article recently about the lawsuit against another Sava Senior Care facility owned and operated by Murray Forman and Leonard Grunstein and others.  Defendants include six companies, an individual and multiple unknown individuals and entities for negligence in a nursing home. Canyon Sudar Partners, SVCare Holdings, Sava Senior Care, SSC Equity Holdings, SMV Management Company, SMV Huntington and Unidentified Entities 1 through 10 are the companies named in the law suit. Huntington Health and Rehabilitation Administrator, Annica Stansberry, and John Does 1 through 10 were also named in the suit.

Faith Cole claims Ruth Haynie was a resident of Huntington Health and Rehabilitation from Sept. 20 until Nov. 1, according to a complaint filed Feb. 25 in Cabell Circuit Court. Cole claims the defendants were aware of Haynie’s medical condition and the care she required, but that during her stay, Haynie experienced falls, a fracture and a subdural hematoma.

Cole claims the defendants owed a duty to residents to exercise reasonable care in providing oversight and management of the nursing home.

The defendants breached their duty by failing to properly manage, operate and/or control the nursing home in a manner that a reasonably careful person/corporation would have provided.

Cole is seeking compensatory damages. She is being represented by James B. McHugh and Michael J. Fuller Jr.

 

Numerous websites and news organizations have written about the recent settlement between the DOJ and Murray Forman, Rubin Schron, and Leonard Grunstein, owners and operators of hundreds of nursing homes through various entities such as Mariner, Sava Senior Care and Fundamental Long Term Care Holdings.  See articles and press releases here, here, here, here, here, here, here, here, here, here, here, and here.

What is incredible and disappointing about the settlement is the DOJ only made these criminals  pay $14 million but did not make them testify, admit guilt, payback the kickback, or take away their ability to continue owning and operating nursing homes.  What kind of penalty is $14 million when they have stolen millions more from Medicare and Medicaid?  Why did the DOJ make the now defunct Mariner pay but not their successor Sava Senior Care?   Why did they allow the Complaint to be dismissed before the settlement?  Why did they allow Forman and Grunstein, the masterminds behind the illegal scheme deny any responsibility or wrongdoing?  Why didn’t they make Forman and Grunstein pay the kickback back to Medicaid and Medicare?

The settlement resolves the United States’ allegations that the defendants solicited and received kickback payments from Omnicare, Inc. (“Omnicare”), the nation’s largest pharmacy that specializes in dispensing drugs to nursing home patients.  

"As outlined in the government’s complaint, Rubin Schron, Leonard Grunstein and Murray Forman tried to disguise an unlawful kickback payment," said Mary Louise Cohen, a Washington, DC, attorney with Phillips & Cohen LLP, which represents the whistle-blower. "Omnicare’s $50 million payment for a small unit of Mariner Health Care — which had less than $3 million in assets and only two employees — just didn’t add up without figuring out what else Omnicare was getting as part of the deal."

In a Complaint filed in March 2009 and unsealed in November 2009, the United States alleged that Omnicare, Mariner, Sava, Grunstein, Forman, and Schron conspired to arrange for Omnicare to pay $50 million in exchange for agreements by Mariner and Sava to use Omnicare’s pharmacy services for 15 years.   In 2004, Grunstein and Forman proposed that Schron provide financial backing for the acquisition of Mariner, which at that time was one of Omnicare’s largest customers. Grunstein and Forman attempted to arrange the Mariner acquisition so that Schron would have to contribute as little cash as possible. To achieve this end, Grunstein and Forman pursued a plan to sell to Omnicare the right to continue providing pharmacy services to Mariner, even though Forman was warned by lawyers that selling the right to provide pharmacy services would constitute an illegal kickback.

Grunstein and Forman thereafter arranged for Omnicare to pay them $50 million to purchase a  Mariner company that had only two employees and no tangible assets.  Omnicare paid $40 million of this amount up front, prior to actually acquiring the Mariner business unit, and simultaneously obtained new 15-year pharmacy contracts from Mariner and from Sava, a new nursing home chain that Grunstein and Forman created from Mariner. Grunstein and Forman illegally tied the new pharmacy contracts to Omnicare’s agreement to purchase the small Mariner business unit, and that the total $50 million purchase price for the business unit actually was a kickback by Omnicare to keep the future business of Mariner and Sava. In 2006, after the Government issued subpoenas concerning the transaction, the individual defendants created backdated documents in a further attempt to hide the kickback.

In November 2009, the United States and Omnicare entered into a $98 million settlement agreement that resolved Omnicare’s civil liability under the False Claims Act for paying kickbacks to keep the Mariner and Sava business.  So Forman and Grunstein coerced OmniCare to pay them a $50 million kickback and Omni had to pay $98 million but Forman and Grunstein and their companies only had to pay $14 million!?!

As part of the settlement, Mariner has entered into a corporate integrity agreement. This agreement provides for Mariner to put in place procedures and reviews to avoid and promptly detect conduct similar to that which gave rise to this matter. At the same time, OIG-HHS has reserved its rights to seek exclusions of Sava, Grunstein, Forman, and/or Schron from participation in Medicare, Medicaid, and all other Federal health care programs.

"I suspect that if you got [Grunstein, Schron and Forman] all in a room and asked them whose fault this was, they’d all be pointing at someone else," says one person familiar with the case. "And that’s really what this transaction was about –setting up all these different entities and shells and moving pieces so that nobody had responsibility."

Rubin Schron, a New York real estate investor who along with National Senior Care Inc., bought Mariner Health Care Inc., which is at the center of the kickback scheme. — Leonard Grunstein, a New York real estate attorney who was a partner with the law firm, Troutman Sanders. He was Schron’s agent in the purchase of Mariner Health Care Inc. and in the alleged kickback scheme. — Murray Forman, an associate of Grunstein’s and Schron’s who also is president of a Long Island school board. — Mariner Health Care Inc., a Delaware corporation with headquarters in Atlanta, Georgia, that operates nursing homes and, according to the government’s complaint in this case, is controlled by Schron. — SavaSeniorCare Administrative Services LLC, a privately held Delaware company with headquarters in Atlanta, Georgia, also reportedly controlled by Schron. Sava affiliates lease and operate nursing homes.

This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion