A key Medicare advisory panel is calling for a 2% bump to Medicare payments for acute care hospitals for 2022 but no hike for physicians.
The report, released Monday from the Medicare Payment Advisory Commission (MedPAC)—which recommends payment policies to Congress—bases payment rate recommendations on data from 2019. However, the commission did factor in the pandemic when evaluating the payment rates and other policies in the report to Congress, including whether policies should be permanent or temporary.
“The financial stress on providers is unpredictable, although it has been alleviated to some extent by government assistance and rebounding service utilization levels,” the report said.
MedPAC recommended that targeted and temporary funding policies are the best way to help providers rather than a permanent hike for payments that gets increased over time.
“Overall, these recommendations would reduce Medicare spending while preserving beneficiaries’ access to high-quality care,” the report added.
MedPAC expects the effects of the pandemic, which have hurt provider finances due to a drop in healthcare use, to persist into 2021 but to be temporary.
It calls for a 2% update for inpatient and outpatient services for 2022, the same increase it recommended for 2021.
The latest report recommends no update for physicians and other professionals. The panel also does not want any hikes for four payment systems: ambulatory surgical centers, outpatient dialysis facilities, skilled nursing facilities and hospices.
MedPAC also recommends Congress reduce the aggregate hospice cap by 20% and that “ambulatory surgery centers be required to report cost data to [Centers for Medicare & Medicaid Services (CMS)],” the report said.
But it does call for long-term care hospitals to get a 2% increase and to reduce payments by 5% for home health and inpatient rehabilitation facilities.
The panel also explores the effects of any policies implemented under the COVID-19 public health emergency, which is likely to extend through 2021 and could continue into 2022.
For instance, CMS used the public health emergency to greatly expand the flexibility for providers to be reimbursed for telehealth services. Use of telehealth exploded during the pandemic after hesitancy among patients to go to the doctor’s office or hospital for care.
“Without legislative action, many of the changes will expire at the end of the [public health emergency],” the report said.
MedPAC recommends Congress temporarily continue some of the telehealth expansions for one to two years after the public health emergency ends. This will give lawmakers more time to gather evidence on the impact of telehealth on quality and Medicare spending.
“During this limited period, Medicare should temporarily pay for specified telehealth services provided to all beneficiaries regardless of their location, and it should continue to cover certain newly-covered telehealth services and certain audio-only telehealth services if there is potential for clinical benefit,” according to a release on the report.
After the public health emergency ends, Medicare should also return to paying the physician fee schedule’s facility rate for any telehealth services. This will ensure Medicare can collect data on the cost for providing the services.
“Providers should not be allowed to reduce or waive beneficiary cost-sharing for telehealth services after the [public health emergency],” the report said. “CMS should also implement other safeguards to protect the Medicare program and its beneficiaries from unnecessary spending and potential fraud related to telehealth.”
Kennett Square, Pa.-based Genesis HealthCare will institute a three-pronged restructuring plan to improve its financial metrics and cut debt by $236 million, the company said March 3.
Genesis HealthCare is a holding company with subsidiaries that provide services to more than 325 skilled nursing facilities and assisted or senior living communities in 24 states.
As part of its financial improvement strategy, Genesis agreed to end master lease agreements at 51 assisted or senior living facilities leased from Welltower and transition them to new operators. Genesis expects to receive $86 million from the deal, which it will use to repay a portion of its debt obligations to Welltower.
Genesis will also receive $170 million in debt reduction from Welltower after completing the transaction.
The company also signed a definitive agreement for a capital infusion of $50 million from ReGen Healthcare, which ups its ownership interest in Genesis to 25 percent.
The third part of the strategy is that it will voluntarily delist its Class A common stock from the New York Stock Exchange and deregister its common stock under the Securities Exchange Act of 1934.
“The severity of the pandemic dramatically impacted patient admissions, revenues and costs, compounding the pressures of our long-term, lease-related debt obligations,” said Genesis CEO Robert Fish. “These restructuring transactions improve the financial and operational stability of the company significantly and build on the encouraging signs we are seeing as COVID-19 case rates continue to materially decline and residents, patients and staff are vaccinated.”
Finding a good long-term care facility for a loved one has always been a difficult process. A new National Bureau of Economic Research working paper suggests that families should also be paying attention to who owns the facility, finding asignificant increase in mortality in nursing homes owned by private equity investors.
Examining Medicare data from over 18,000 nursing homes, 1,674 of which were owned by private equity (PE) firms, researchers found that PE ownership increased Medicare patient mortality by 10 percent—translating to a possible 20,150 additional lives lost. PE-owned facilities were also 11 percent more expensive.
Counterintuitively, lower-acuity patients had the greatest increase in mortality. Researchers found staffing decreased by 1.4 percent in PE-owned facilities, suggesting that shorter-staffed facilities may be forced to shift attention to sicker patients, leading to greater adverse effects on patients requiring less care.
Antipsychotic use, which carries a higher risk in the elderly, was also a whopping 50 percent higher.
Nursing homes are low-margin businesses, with profits of just 1-2 percent per year—and PE ownership did not improve financial performance.
Researchers found private equity profited from three strategies:“monitoring fees” paid to services also owned by the PE firm, lease payments after real estate sales, and tax benefits from increased interest payments, concluding that PE is shifting operating costs away from patient care in order to increase return on investment. Private equity investment in care delivery assets has skyrocketed over the past decade.
This study draws the most direct correlation between PE investment and an adverse impact on patient outcomes that we’ve seen so far, highlighting the need for increased regulatory scrutiny to ensure that patient safety isn’t sacrificed for investor returns.
At the last minute, President Donald Trump granted pardons to several individuals convicted in huge Medicare swindles that prosecutors alleged often harmed or endangered elderly and infirm patients while fleecing taxpayers.
“These aren’t just technical financial crimes. These were major, major crimes,” said Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, an advocacy group.
The list of some 200 Trump pardons or commutations, most issued as he vacated the White House this week, included at least seven doctors or health care entrepreneurs who ran discredited health care enterprises, from nursing homes to pain clinics. One is a former doctor and California hospital owner embroiled in a massive workers’ compensation kickback scheme that prosecutors alleged prompted more than 14,000 dubious spinal surgeries. Another was in prison after prosecutors accused him of ripping off more than $1 billion from Medicare and Medicaid through nursing homes and other senior care facilities, among the largest frauds in U.S. history.
“All of us are shaking our heads with these insurance fraud criminals just walking free,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. The White House argued all deserved a second chance. One man was said to have devoted himself to prayer, while another planned to resume charity work or other community service. Others won clemency at the request of prominent Republican ex-attorneys general or others who argued their crimes were victimless or said critical errors by prosecutors had led to improper convictions.
Trump commuted the sentence of former nursing home magnate Philip Esformes in late December. He was serving a 20-year sentence for bilking $1 billion from Medicare and Medicaid. An FBI agent called him “a man driven by almost unbounded greed.” Prosecutors said that Esformes used proceeds from his crimes to make a series of “extravagant purchases, including luxury automobiles and a $360,000 watch.”
Esformes also bribed the basketball coach at the University of Pennsylvania “in exchange for his assistance in gaining admission for his son into the university,” according to prosecutors.
Fraud investigators had cheered the conviction. In 2019, the National Health Care Anti-Fraud Association gave its annual award to the team responsible for making the case. Saccoccio said that such cases are complex and that investigators sometimes spend years and put their “heart and soul” into them. “They get a conviction and then they see this happen. It has to be somewhat demoralizing.”
Tim McCormack, a Maine lawyer who represented a whistleblower in a 2007 kickback case involving Esformes, said these cases “are not just about stealing money.”
“This is about betraying their duty to their patients. This is about using their vulnerable, sick and trusting patients as an ATM to line their already rich pockets,” he said. He added: “These pardons send the message that if you are rich and connected and powerful enough, then you are above the law.”
The Trump White House saw things much differently.
“While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,” the White House pardon statement said.
The White House said the action was backed by former Attorneys General Edwin Meese and Michael Mukasey, while Ken Starr, one of Trump’s lawyers in his first impeachment trial, filed briefs in support of his appeal claiming prosecutorial misconduct related to violating attorney-client privilege.
Trump also commuted the sentence of Salomon Melgen, a Florida eye doctor who had served four years in federal prison for fraud. That case also ensnared U.S. Sen. Robert Menendez (D-N.J.), who was acquitted in the case and helped seek the action for his friend, according to the White House.
Prosecutors had accused Melgen of endangering patients with needless injections to treat macular degeneration and other unnecessary medical care, describing his actions as “truly horrific” and “barbaric and inhumane,” according to a court filing.
Melgen “not only defrauded the Medicare program of tens of millions of dollars, but he abused his patients — who were elderly, infirm, and often disabled — in the process,” prosecutors wrote.
These treatments “involved sticking needles in their eyes, burning their retinas with a laser, and injecting dyes into their bloodstream.”
Prosecutors said the scheme raked in “a staggering amount of money.” Between 2008 and 2013, Medicare paid the solo practitioner about $100 million. He took in an additional $10 million from Medicaid, the government health care program for low-income people, $62 million from private insurance, and approximately $3 million in patients’ payments, prosecutors said.
In commuting Melgen’s sentence, Trump cited support from Menendez and U.S. Rep. Mario Diaz-Balart (R-Fla.). “Numerous patients and friends testify to his generosity in treating all patients, especially those unable to pay or unable to afford healthcare insurance,” the statement said.
In a statement, Melgen, 66, thanked Trump and said his decision ended “a serious miscarriage of justice.”
“Throughout this ordeal, I have come to realize the very deep flaws in our justice system and how people are at the complete mercy of prosecutors and judges. As of today, I am committed to fighting for unjustly incarcerated people,” Melgen said. He denied harming any patients.
Faustino Bernadett, a former California anesthesiologist and hospital owner, received a full pardon. He had been sentenced to 15 months in prison in connection with a scheme that paid kickbacks to doctors for admitting patients to Pacific Hospital of Long Beach for spinal surgery and other treatments.
“As a physician himself, defendant knew that exchanging thousands of dollars in kickbacks in return for spinal surgery services was illegal and unethical,” prosecutors wrote.
Many of the spinal surgery patients “were injured workers covered by workers’ compensation insurance. Those patient-victims were often blue-collar workers who were especially vulnerable as a result of their injuries,” according to prosecutors.
The White House said the conviction “was the only major blemish” on the doctor’s record. While Bernadett failed to report the kickback scheme, “he was not part of the underlying scheme itself,” according to the White House.
The White House also said Bernadett was involved in numerous charitable activities, including “helping protect his community from COVID-19.” “President Trump determined that it is in the interests of justice and Dr. Bernadett’s community that he may continue his volunteer and charitable work,” the White House statement read.
Others who received pardons or commutations included Sholam Weiss, who was said to have been issued the longest sentence ever for a white collar crime — 835 years.“Mr. Weiss was convicted of racketeering, wire fraud, money laundering, and obstruction of justice, for which he has already served over 18 years and paid substantial restitution. He is 66 years old and suffers from chronic health conditions,” according to the White House.
John Davis, the former CEO of Comprehensive Pain Specialists, the Tennessee-based chain of pain management clinics, had spent four months in prison. Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.
Trump’s pardon statement cited support from country singer Luke Bryan, said to be a friend of Davis’.
“Notably, no one suffered financially as a result of his crime and he has no other criminal record,” the White House statement reads.
“Prior to his conviction, Mr. Davis was well known in his community as an active supporter of local charities. He is described as hardworking and deeply committed to his family and country. Mr. Davis and his wife have been married for 15 years, and he is the father of three young children.”
CPS was the subject of a November 2017 investigation by KHN that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers.
The state has lost a greater share of its nursing home residents to COVID-19 than any other state this fall.
On October 9, an employee in the business office at Tieszen Memorial Home in Marion, South Dakota, tested positive for the coronavirus. She was sent home immediately, but three days later, a nursing aide and a housekeeper both tested positive.
Marion, a town of fewer than 1,000 residents, was experiencing a sharp uptick in cases — what scientists call community spread. It became more and more likely that the nursing home’s employees had become infected while, for example, grocery shopping.
On October 16, COVID-19 killed its first Tieszen resident. At that point, about thirteen of the home’s 55 residents had tested positive.
Nursing home administrator Laura Wilson called the days that followed the worst of her career.
“You almost feel like a battle zone,” she said. “We said, ‘You know, right now, we just need to survive.’”
South Dakota Republican Gov. Kristi Noem has taken a notably relaxed approach to the pandemic. This autumn, months deep into this pandemic, nursing homes there have seen a larger share of their residents die than any other state.
At Jenkin’s Living Center in Watertown, 24 residents have died from COVID-19 since the last week of October — about a fifth of the residents there — data submitted to the federal government show. Thirteen patients at Weskota Manor in Wessington Springs — more than a third of its patients — died from COVID-19 this autumn, most of them in one week. Walworth County Care Center in Selby, a 50-bed facility, saw COVID-19 kill 12 patients this autumn, an administrator said. Overall, more than 40 percent of South Dakota nursing homes have lost a tenth or more of their patients to the coronavirus, according to a Center for Public Integrity analysis of data from the federal Centers for Medicare and Medicaid Services.
Nationwide, more than 100,000 residents of long-term care facilities have died of COVID-19, making up 38% of the nation’s virus deaths, according to The Atlantic’s Covid Tracking Project, even though they represent less than 1 percent of the population.
The federal government has made protecting the elderly a priority, shipping millions of rapid tests to nursing homes across the country. Public health experts spent the first nine months of the pandemic perfecting strategies to keep the virus from spreading in close quarters. But, as researchers have learned, whether nursing home residents die from COVID-19 depends less on what happens inside than outside. Once COVID-19 permeates a town, there’s a limit to what nursing homes alone can do.
And that has made South Dakota an especially deadly place.
A LONG STRING OF DEATHS
During Tieszen’s outbreak, the nursing home was eerily quiet. On a normal day, “The Price is Right” might blare from a room, echoing down the hallways. But when the coronavirus hit, all the residents’ doors had to be closed to try to control the spread.
Before October, Tieszen had pandemic challenges but not mass tragedy. Wilson was forced to hunt for N95 masks on eBay, even though South Dakota is home to a 3M factory that makes them. She relied on her son, who works at Sam’s Club, to buy one pack of disinfecting wipes every day for the nursing home’s stockpile. Back when she was using lab-confirmed tests to screen her staff, she had trouble getting test results back within the time recommended by federal guidelines, as the Sioux Falls lab she had contracted with was swamped. And she says, like always, staffing was a problem: Tieszen told the federal government it was short on nurses and aides every week in October and November.
Wilson, who has worked at the nursing home for 42 years, said her staff did everything it could during the outbreak. Indeed, Tieszen, a small nonprofit that has earned five stars in the federal government’s nursing home quality rankings, passed three state inspections of its infection-control program between May and November, records show. It received roughly $70,000 in CARES Act incentive payments from the federal government in September based on good performance.
When the coronavirus hit, the nursing home dedicated two of its wings to COVID-19 patients, isolating them from other residents, until so many contracted the virus that they had to stay in their rooms. The entire nursing home, essentially, became a COVID ward. Wilson’s own 85-year-old father tested positive. Nurses worked overtime; Wilson put in 80-hour weeks and hired temporary help. Staff served residents’ meals on paper plates instead of dishes that might retain the virus. They conducted weekly audits of how often staff were washing their hands. They tested workers and residents at any sign of a sniffle, as well as regularly regardless of symptoms, using equipment shipped to the nursing home from the federal government. They followed up positive rapid test results with lab-confirmed PCR tests.
Despite all of these measures, the virus spread quickly.
The week after Tieszen’s first death on October 16, five more residents died, Wilson said. Among them was 89-year-old Maxine Ortman, a former teacher suffering from dementia whose husband would visit often, before the pandemic, from his home across the street.
The following week, seven more died.
In November, another seven died. They included 68-year-old Larry Johnson, a diabetic and former mechanic whose sense of humor and work ethic drew customers from all over northeastern South Dakota, his family wrote in his obituary.
And they included Randy Wieman, 64. He had Down syndrome, and died a week after testing positive for the virus, said his older sister, Carol Husby. He loved music, dancing and his many nieces and nephews. A normal December would find them celebrating Wieman’s birthday with chocolate cake.
“He would call me every morning to ask if I was up,” Husby said. “Randy was an amazing individual.”
In total, 20 residents died of the coronavirus — more than a third of those living at the Tieszen nursing home — in the space of five weeks.
OUT-OF-CONTROL SPREAD
Tamara Konetzka, a health researcher at the University of Chicago, has been studying the fate of nursing homes in the pandemic since the spring.
Her conclusion: “Nothing much has changed.”
Despite more testing and efforts to hone infection control practices, despite nine months of scientific study of the virus, nursing home residents are still at the mercy of their surrounding communities. “If they’re in virus hotspots, they’re going to be at risk,” Konetzka said. “The idea that we have found the secret to preventing nursing home cases and death is a little crazy.”
And this autumn, nearly all of South Dakota has been a hotspot. The state has ranked at or near the top of all 50 states in new coronavirus cases and deaths for months in reports issued to governors by the White House Coronavirus Task Force. During one week prior to Thanksgiving, South Dakota had 988 new coronavirus cases per 100,000 residents — more than double the national average. It had 19.6 deaths per 100,000 residents — the worst rate in the nation and more than six times the national average.
The state’s governor, Noem, is widely believed to have national political ambitions. She has proudly shunned strict measures to curb the virus. “Rather than following the pack and mandating harsh rules,” she wrote in The Wall Street Journal earlier this month, “we ask all South Dakotans to take personal responsibility for their health …. The state hasn’t issued lockdowns or mask mandates. We haven’t shut down businesses or closed churches.”
South Dakota Republican Gov. Kristi Noem has taken a relaxed approach to the pandemic, shunning strict measures to curb the virus. (AP Photo/James Nord, File)
Many South Dakotans have refused to wear masks or socially distance. In September, Wilson spoke at a meeting of local business owners in Marion and urged them to take mask-wearing seriously. She was met with blank stares.
“When I left that meeting I had basically resigned myself to the fact that I am living in a different world, and they don’t get it,” she said. “I’d be the only person in the grocery store with a mask on.”
Though limiting community spread is the best way to protect nursing homes, researchers said, some measures — especially having enough staff — can affect the severity of outbreaks. Here is where the federal government failed spectacularly, experts said. “What they needed — damn it — they needed money for more staffing,” said Larry Polivka, executive director of the aging-focused Claude Pepper Center at Florida State University. “And they needed all of the PPE. They needed massive testing capacity as quickly as possible in the spring — they didn’t get it.”
Wilson said the South Dakota Department of Health was helpful when she called or emailed with questions. The state continued to inspect nursing homes for infection control practices, and just 14 South Dakota nursing homes were cited by inspectors for inadequate infection control between March and October, according to federal data. The state has a program to recruit retired nurses and doctors to help work in healthcare settings. The federal government sent a “strike team” to South Dakota in October to help nursing homes tackle the coronavirus, a spokesman for CMS said in an email, and federal officials have offered training and guidance.
But it’s unclear what else, if anything, South Dakota did to help nursing homes weather the brutal autumn. For nine weeks in October and November, on average, nearly a quarter of all nursing homes in South Dakota told the federal government they were short on nursing staff, far more than the 16 percent that did so nationwide. On average, more than 40 percent of South Dakota nursing homes reported shortages of aides, more than double the nationwide figure. And 13 percent of South Dakota nursing homes during that time reported shortages of PPE — roughly the same as did nationwide.
Policymakers of all stripes, even those who embrace a controversial “herd immunity” strategy and wish the virus to run free through the population, stress the need to protect long-term-care residents. Noem has not explicitly endorsed a herd immunity approach but has emphasized that the coronavirus is less likely to harm young people. She has acknowledged that the elderly face greater risks from the coronavirus.
Yet the governor’s spokesperson did not answer questions from the Center for Public Integrity regarding nursing homes or respond to requests for comment. Noem’s health secretary did not respond to a request for an interview. The South Dakota Department of Health declined to answer multiple emails sent by Public Integrity over multiple weeks. The state’s long-term-care ombudsman refused through an agency spokesman to answer questions. When pressed, the spokesman said he did not know the reason but was given orders to decline the interview.
Even supposed advocates for nursing homes are reluctant to speak about the toll the coronavirus is taking on South Dakota’s elderly. Two trade associations representing nursing homes in the state declined interviews. One of them, the South Dakota Health Care Association, recommended that a reporter speak to the state department of health instead. Another lobbyist, who wished to remain anonymous to avoid angering the Noem administration, said people fear upsetting the governor’s office, known for its guarded approach to dealing with the media.
The state also waited until September to decide how to spend nearly $600 million in CARES Act funding approved by Congress in March. Noem finally set aside $115 million for nursing homes and other local health providers. But nursing homes had to apply for the funding during an 11-day period in October and meet strict qualifications. Tieszen applied but was not granted funds. Documents from the South Dakota Legislature dated Dec. 7 show that 115 health care organizations applied for the funding, and 47 were approved. But just $1.9 million had been handed out as of Dec. 18. The state is now proposing another grant program to distribute the money to health organizations based on bed numbers.
But for many nursing homes, the money comes too late to save lives. South Dakota may be past the worst of this COVID-19 surge. New coronavirus cases in the state are on the wane; vaccines are perhaps weeks away for nursing home residents at Tieszen and elsewhere.
All told, the state lost roughly one out of every 10 nursing home residents to COVID-19, according to federal data.
“I don’t understand why people didn’t take it seriously right from the beginning,” Husby said. “It just breaks my heart because it didn’t have to be this way.”
A Florida healthcare executive is appealing $43 million in financial penalties after President Donald Trump commuted his 20-year prison sentence in December, according to law.com.
Philip Esformes, who operated a chain of skilled nursing facilities and assisted living facilities in Florida, was sentenced Sep. 12 to 20 years in prison. The sentencing came roughly five months after a 12-person jury found him guilty of more than 20 charges, including paying and receiving kickbacks, money laundering and bribery. He was convicted after an eight-week trial for his role in a $1.3 billion Medicare and Medicaid fraud case.
President Trump in late December commuted Mr. Esformes’ prison sentence. The communication left other aspects of his sentence intact, including restitution.
Mr. Esformes still must forfeit $38 million and owes about $5 million in restitution, according to McKnight’s Senior Living. In the appeal of the financial penalties, lawyers cite the federal government’s “inability to show a single instance of fraudulent billing,” according to the report.
Lown Institute berates greedy pricing, ethical lapses, wallet biopsies, and avoidable shortages.
Greedy corporations, uncaring hospitals, individual miscreants, and a task force led by Jared Kushner were dinged Tuesday in the Lown Institute‘s annual Shkreli awards, a list of the top 10 worst offenders for 2020.
Named after Martin Shkreli, the entrepreneur who unapologetically raised the price of an anti-parasitic drug by a factor of 56 in 2015 (now serving a federal prison term for unrelated crimes), the list of shame calls out what Vikas Saini, the institute’s CEO, called “pandemic profiteers.” (Lown bills itself as “a nonpartisan think tank advocating bold ideas for a just and caring system for health.”)
Topping the listwas the federal government itself and Jared Kushner, President’s Trump’s son-in-law, who led a personal protective equipment (PPE) procurement task force. The effort, called Project Airbridge, was to “airlift PPE from overseas and bring it to the U.S. quickly,” which it did.
“But rather than distribute the PPE to the states, FEMA gave these supplies to six private medical supply companies to sell to the highest bidder, creating a bidding war among the states,” Saini said. Though these supplies were supposed to go to designated pandemic hotspots, “no officials from the 10 hardest hit counties” said they received PPE from Project Airbridge. In fact, federal agencies outbid states or seized supplies that states had purchased, “making it much harder and more expensive” for states to get supplies, he said.
Number twoon the institute’s list: vaccine maker Moderna, which received nearly $1 billion in federal funds to develop its mRNA COVID-19 preventive. It set a price of between $32 and $37 per dose, more than the U.S. agreed to pay for other COVID vaccines. “Although the U.S. has placed an order for $1.5 billion worth of doses at a discount, a price of $15 per dose, given the upfront investment by the U.S. government, we are essentially paying for the vaccine twice,” said Lown Institute Senior Vice President Shannon Brownlee.
Webcast panelist Don Berwick, MD, former acting administrator for the Centers for Medicare & Medicaid Services, noted that a lot of work went into producing the vaccine at an impressive pace, “and if there’s not an immune breakout, we’re going to be very grateful that this happened.” But, he added, “I mean, how much money is enough? Maybe there needs to be some real sense of discipline and public spirit here that goes way beyond what any of these companies are doing.”
In third place: four California hospital systems that refused to take COVID-19 patients or delayed transfers from hospitals that were out of beds.A Wall Street Journal investigation found that these refusals or delays were based on the patients’ ability to pay; many were on Medicaid or were uninsured.
“In the midst of such a pandemic, to continue that sort of behavior is mind boggling,” said Saini. “This is more than the proverbial wallet biopsy.”
The remaining seven offenders:
4. Poor nursing homes decisions, especially one by Soldiers’ Home for Veterans in western Massachusetts, that worsened an already terrible situation. At Soldiers’ Home, management decided to combine the COVID-19 unit with a dementia unit because they were low on staff, said Brownlee. That allowed the virus to spread rapidly, killing 76 residents and staff as of November. Roughly one-third of all COVID-19 deaths in the U.S. have been in long-term care facilities.
5. Pharmaceutical giants AstraZeneca, GlaxoSmithKline, Pfizer, and Johnson & Johnson,which refused to share intellectual property on COVID-19, instead deciding to “compete for their profits instead,” Saini said. The envisioned technology access pool would have made participants’ discoveries openly available “to more easily develop and distribute coronavirus treatments, vaccines, and diagnostics.”
Saini added that he was was most struck by such an attitude of “historical blindness or tone deafness” at a time when the pandemic is roiling every single country.
Berwick asked rhetorically, “What would it be like if we were a world in which a company like Pfizer or Moderna, or the next company that develops a really great breakthrough, says on behalf of the well-being of the human race, we will make this intellectual property available to anyone who wants it?”
6. Elizabeth Nabel, MD, CEO of Brigham and Women’s Hospital in Boston, because she defended high drug prices as a necessity for innovation in an op-ed, without disclosing that she sat on Moderna’s board. In that capacity, she received $487,500 in stock options and other payments in 2019. The value of those options quadrupled on the news of Moderna’s successful vaccine. She sold $8.5 million worth of stock last year, after its value nearly quadrupled. She resigned from Moderna’s board in July and, it was announced Tuesday, is leaving her CEO position to join a biotech company founded by her husband.
7. Hospitals that punished clinicians for “scaring the public,” suspending or firing them, because they “insisted on wearing N95 masks and other protective equipment in the hospital,” said Saini. Hospitals also fired or threatened to fire clinicians for speaking out on COVID-19 safety issues, such as the lack of PPE and long test turnaround times.
Webcast panelist Mona Hanna-Attisha, MD, the Flint, Michigan, pediatrician who exposed the city’s water contamination, said that healthcare workers “have really been abandoned in this administration” and that the federal Occupational Safety and Health Administration “has pretty much fallen asleep at the wheel.” She added that workers in many industries such as meatpacking and poultry processing “have suffered tremendously from not having the protections or regulations in place to protect [them].”
8. Connecticut internist Steven Murphy, MD, who ran COVID-19 testing sites for several towns, but conducted allegedly unnecessary add-ons such as screening for 20 other respiratory pathogens. He also charged insurers $480 to provide results over the phone, leading to total bills of up to $2,000 per person.
“As far as I know, having an MD is not a license to steal, and this guy seemed to think that it was,” said Brownlee.
9. Those “pandemic profiteers”who hawked fake and potentially harmful COVID-19 cures. Among them: televangelist Jim Bakker sold “Silver Solution,” containing colloidal silver, and the “MyPillow Guy,” Mike Lindell, for his boostering for oleandrin.
“Colloidal silver has no known health benefits and can cause seizures and organ damage. Oleandrin is a biological extract from the oleander plant and known for its toxicity and ingesting it can be deadly,” said Saini.
Others named by the Lown Institute include Jennings Ryan Staley, MD — now under indictment — who ran the “Skinny Beach Med Spa” in San Diego which sold so-called COVID treatment packs containing hydroxychloroquine, antibiotics, Xanax, and Viagra, all for $4,000.
Berwick commented that such schemes indicate a crisis of confidence in science, adding that without facts and science to guide care, “patients get hurt, costs rise without any benefit, and confusion reigns, and COVID has made that worse right now.”
Brownlee mentioned the “huge play” that hydroxychloroquine received and the FDA’s recent record as examples of why confidence in science has eroded.
10. Two private equity-owned companies that provide physician staffing for hospitals, Team Health and Envision, that cut doctors’ pay during the first COVID-19 wave while simultaneously spending millions on political ads to protect surprise billing practices. And the same companies also received millions in COVID relief funds under the CARES Act.
Berwick said surprise billing by itself should receive a deputy Shkreli award, “as out-of-pocket costs to patients have risen dramatically and even worse during the COVID pandemic… and Congress has failed to act. It’s time to fix this one.”
President Donald Trump commuted a 20-year sentence for a Florida healthcare executive who was convicted for his role in a $1.3 billion Medicare fraud case. It was the largest healthcare fraud scheme ever charged by the U.S. Justice Department.
In April 2019, Philip Esformes, who operated a network of more than 30 skilled nursing homes and assisted living facilities in Florida, was found guilty of 20 charges, including paying and receiving kickbacks, money laundering and bribery, according to the Department of Justice. He was sentenced to 20 years in prison and ordered to pay $44.2 million in forfeiture and restitution. The commutation doesn’t overturn the restitution order.
Mr. Esformes was among several people President Trump granted a full pardon or commutation of all or some of their sentences. In a Dec. 22 news release, the White House said Mr. Esformes is in declining health.
An investment firm has bought more than 20 nursing homes during the coronavirus pandemic, leading to disruptions at multiple facilities that weakened care for vulnerable residents amid the worst health crisis in generations, interviews and documents show.
From April through July, the New Jersey-based Portopiccolo Group — which buys troubled nursing homes and tries to make them profitable — paid hundreds of millions of dollars to acquire facilities in Maryland, Virginia and elsewhere.
The purchases drew scant scrutiny from regulators despite poor safety records at dozens of the company’s other nursing homes, including hefty fines for infection-control lapses and shortages of staff.
Many of Portopiccolo’s existing facilities were struggling to contain outbreaks of the coronavirus when its leaders went seeking new properties, state health records show. At a Virginia nursing home, staff hosted a hallway dance party for residents in April, weeks after federal guidelines had cautioned against such events. Conditions were so bad at one North Carolina facility that it was placed on a federal watch list even after the Centers for Disease Control and Prevention dispatched a strike team to help.
At its new nursing homes in Maryland, Portopiccolo’s operating companies made major changes to insurance and time-off benefits, failed to buy enough supplies and protective equipment and asked some employees to keep working after testing positive for coronavirus, said 14 current and former employees from four of the eight facilities.
Many veteran staffers quit as a result of the changes, said the employees, most of whom spoke on the condition of anonymity because they feared reprisals. Those who remained found themselves tending to dozens of residents at a time, the employees said.
“It was hair on fire,” said Katrina Pearthree, a former social worker at two facilities purchased by Portopiccolo over the last 15 months. She resigned from her job after losing health insurance coverage and disagreeing with new managers on patient care.
Portopiccolo spokesman John Collins denied that caregiving suffered and said that while benefits changed, they remained competitive within the industry. The firm, he said, wants to fill the gap left by nursing home owners exiting the industry because of the pandemic.
“Our company was founded by people who share a passion for caring for the sick, elderly and forgotten,” Collins said in a statement. “Any attempts to characterize our work or the work of our teams differently is flat out wrong.”
Elder-care advocates say Portopiccolo’s record of fines at other facilities, and the timing of its acquisitions, should have raised red flags for regulators, especially as the virus decimated the country’s nursing home population.
But the Centers for Medicare and Medicaid Services (CMS), the main federal agency regulating nursing homes, said the only way it tracks ownership changes is when facilities report the information for Medicare enrollment.
President-elect Joe Biden has said he wants to increase federal oversight through mandatory audits of nursing home cost reports and ownership data. Typically, such monitoring has fallen to state regulators, said Charlene Harrington, a professor emerita of sociology and nursing at the University of California at San Francisco. But even before the coronavirus crisis, she said, most states did a poor job.
In Maryland, the commission that oversees changes in nursing home ownership said the sale of a facility requires little more than “timely notification.” Virginia officials said they don’t closely monitor such sales, either.
“Your history indicates what you’re going to do in the future,” said Richard Mollot, executive director of a national advocacy group called the Long Term Care Community Coalition. “There needs to be more oversight of these purchases.”
‘From bad to worse’
Portopiccolo founders Simcha Hyman, 31, and Naftali Zanziper, 38, bought their first nursing home in 2016 after selling their medical supplies company to a private equity firm. They have since purchased more than 70 facilities in nine states, including 18 in Virginia. The nursing homes are run by operating companies set up and financed by the firm, including Peak Healthcare, Accordius Health and Pelican Health — a trend first reported by the business magazine Barron’s.
For years, Hyman and Zanziper described Portopiccolo as a private equity firm. But that description, along with the group’s promise to swiftly turn “distressed assets” profitable, was removed from the Portopiccolo website in early December after inquiries from The Washington Post about the firm’s nursing home acquisitions.
Collins said the label “private equity” — which typically describes groups that raise funding from private investors — is inaccurate. He declined to explain why the group described itself that way for months, including in news releases, and still does on its LinkedIn page.
Atul Gupta, a professor of health-care management at the Wharton School at the University of Pennsylvania, said it is possible Portopiccolo is trying to rebrand itself because of the increasingly negative stigma tied to private equity groups — which have been criticized for slashing costs at nursing homes, then selling them off to new owners.Studies, by Gupta and others, show that private equity ownership correlates with declines in staffing and quality of care.
Collins declined to say how many facilities Portopiccolo owns, how many it has sold or how much the firm has profited. Neither Peak Healthcare nor Accordius Health responded to multiple requests for comment.
An analysis of federal data shows that nearly 70 percent of facilities Portopiccolo owned before the pandemic have Medicare ratings of one or two stars out of five — based on patient-care metrics such as staffing ratios and infection control.
Two Portopiccolo facilities last month were placed in a federal monitoring program for having “a history of serious quality issues”; two others were listed as candidates because of severe deficiencies. Prior to the pandemic, the firm’s facilities in North Carolina were fined more than $480,000 for violating state and federal rules, federal data shows.
One facility placed in the monitoring program was the Citadel Salisbury, a one-star nursing home in Salisbury, N.C., where more than 150 staff and residents have contracted the virus, according to state data. Employees and residents alleged in a lawsuit filed in Rowan County Superior Court that Portopiccolo, which bought the facility from Genesis HealthCare on Feb. 1, left the nursing home woefully unprepared for the pandemic.
Employees testified in sworn affidavits that managers from Accordius, the operating group, prohibited staff from wearing masks in March, saying that doing so would scare residents. Nurses sometimes had to care for more than 50 residents at a time, employees alleged.
The lawsuit asks that the facility be required to improve conditions or be closed or put under new ownership. But lawyers for Portopiccolo asserted that staffing and equipment have been adequate. Hyman, Zanziper and Accordius executives sought to downplay their role at the Citadel, claiming in a motion to dismiss that daily operations were the responsibility of staff on site.
At the same time, Portopiccolo sued the families in federal court, arguing that they had signed agreements that preclude litigation against the nursing home.
Such arbitration clauses have become increasingly common at for-profit nursing homes,studies show, and have been criticized by consumer advocates as well as lawmakers as a way for facilities to avoid accountability. Biden said he wants to restore an Obama-era ban on the practice that was overturned by the Trump administration.
In June, North Carolina officials identified a slew of violations at the Citadel that they said placed residents in “immediate jeopardy,” including a systemic failure to control infection and failing to inform the families of those who tested positive. Some found out their relatives had the virus from an emergency room physician. One man said he learned his aunt had died only when a funeral director called, asking what to do with her body.
Two hundred miles away in Virginia, staff shortages at Accordius Health in Harrisonburg were so dire before the pandemic that residents sometimes went days without showers, inspection records show.
“This place has gone from bad to worse,” one resident told an inspector. “They cut costs at our expense.”
After Accordius took over the facility in 2019, Ruth Simmers-Domzalski said, she noticed fewer staff members tending to her mother-in-law, Mary Domzalski, whose family twice found her lying on soiled bedsheets. On April 6, the facility held a hallway dance party where residents interacted without masks.
Domzalski, 88, attended. Three weeks later, she died of covid-19.
When asked about the event, Collins said the dance party did not conflict with federal guidelines at the time. CMS said on April 2 that all nursing home residents should cover their noses and mouths while interacting with staff; nearly a month before, it told facilities to cancel all group activities.
Tumultuous takeovers
Portopiccolo declined to say how many nursing homes it has bought during the pandemic, but The Post used CMS records to identify at least 22 facilities — eight in Maryland — that reported that Hyman and Zanziper had become owners since April.
Three of the Maryland facilities were bought from Genesis HealthCare, one of the largest skilled-nursing operators in the country. Amid plummeting occupancy rates and ballooning expenses, Genesis told stockholders this year that the firm would “improve its liquidity position” by selling off nearly two dozen of its roughly 400 nursing homes.
One was the Sligo Creek Center in Takoma Park, Md., where Pearthree, 59, worked part time as a social worker.
She had spent 18 years full time at another Genesis nursing home, the Fox Chase Rehabilitation Center in Silver Spring, leaving months after Portopiccolo bought it in 2019.
That sale was a “nightmare,” said Pearthree, recalling that new managers failed to secure local suppliers, leaving employees scrambling for medication and food. One afternoon, she said, staff members were unable to access digital patient records because Peak Healthcare had not put a new software system in place.
Less than a year after she left Fox Chase, Pearthree found herself facing another Portopiccolo takeover — this time amid a pandemic.
Again, the transition was chaotic. Peak did not actively recruit employees or offer them competitive packages prior to the takeover, leading to the departure of longtime staffers, including the administrator and director of nursing, said Pearthree and a senior Sligo Creek employee who spoke on the condition of anonymity because she feared reprisals. The former administrator and director of nursing did not respond to requests for comment.
Pearthree, a graduate student who worked 30 hours a week, was told she would have to increase her hours to keep her health insurance, she and Collins said.
Pearthree and the current employee also said Peak stopped providing hazard pay for contract employees and laid off a group of nonmedical staff Genesis had assembled to take temperatures and wipe down surfaces at the onset of the pandemic.
The facility has been cited twice by Maryand regulators since Peak took over, state inspection records show — in June for failing to test all residents and staff, and in August for failing to consistently inform family members of viral outbreaks.
Collins said staffing gaps were part of a nationwide shortage of nursing home workers and disputed the accounts from Pearthree and the current employee, saying supplies at both Sligo and Fox Chase were adequate and benefits were fair.
Eleven workers at three other Maryland nursing homes acquired by Portopiccolo during the pandemic said they lost paid time off and were offered more limited insurance packages. One worker who has asthma and high blood pressure said her bimonthly health insurance co-pay increased from $67 to $113 when Peak took over.
At Peak Healthcare Chestertown, on Maryland’s Eastern Shore, employees said the company offered a more limited benefits package than the facility’s previous owners, Autumn Lake, including less paid time off for new employees and no paid time off on major holidays.
The company scrimped on supplies, including cutlery, cleaning materials and clothing for residents, said employees at three facilities, who also spoke on the condition of anonymity out of fear of retribution.
Three employees at another facility said nurses have had to use hand soap to clean residents and rip up towels or bedsheets to dry them off.
“We risk our lives every day, and we don’t have proper supplies,” said one geriatric nursing assistant who brings her own gloves to work. “At what point do we put the patients first?”
Collins denied there were shortages, adding that at Chestertown, the budget for supplies had actually increased. He also denied that employees lost time off to which they were entitled, but said he could not address specific claims without knowing the names of the employees.
Reducing operating costs appears to be part of Portopiccolo’s business strategy, according to documents reviewed by The Post. In 2019, while acquiring three nursing homes in North Carolina, the group said it expected to save $360,000 by lowering expenses associated with employee benefits and insurance and $410,000 by cutting equipment and transportation costs. These measures, outlined in a mortgage loan contract, had allowed Portopiccolo to save more than $50 million across 37 facilities.
Collins said Portopiccolo has invested more than $6.7 million to purchase cleaning supplies and protective equipment since the start of this year. In comparison, Genesis, which operates about three times as many nursing homes, said that as of September, it had spent about $40 million more than normal on cleaning supplies and protective equipment.
Little government scrutiny
A recent study by the Long Term Care Community Coalition identified 15 states as having some good oversight practices for nursing home purchases, including requiring companies to disclose what other assets they own. Of the nine states in which Portopiccolo operates, none made the list.
“If your facilities in other states have very low staffing or a history of citations, you should not be allowed to purchase another one,” said Mollot, executive director of the coalition. “But states have a very hands-off approach to anything that happens outside their borders.”
Maryland Department of Health spokesman Charles Gischlar said the agency saw “no reason to change” the way it tracks shifts in nursing home ownership during the pandemic.
The Maryland Health Care Commission, another entity meant to oversee the sale of nursing homes, last year started asking prospective owners to affirm that they have not been convicted of a felony within the past 10 years or penalized more than $10 million because of their ownership of nursing homes.
But this requirement, which was designed “to keep out poor performers,” has not deterred a single transaction, said Paul Parker, a director at the commission.
For each facility that Hyman and Zanziper bought in Maryland, they declared to state regulators that they would not make substantive changes to services, staffing or bed ratios. State officials did not respond to questions asking how they ensured this would be true.
Gupta, the Wharton professor, said there should have been a moratorium on nursing home sales when the pandemic started because the changes that follow any acquisition can hamper a facility’s pandemic response.
But federal and state lawmakers never considered such a move.
“Nobody knew what was going on, nobody was in control,” Gupta said.
Joani Latimer, Virginia’s long-term-care ombudsman, said her office has been concerned by Portopiccolo’s pattern of buying facilities with low CMS ratings. Such facilities need more investment — not less — for conditions to turn around, she said.
“It’s not a process that you can just streamline to machine-like efficiency,” she said. “These are human needs with human challenges.”
Officials at the Virginia Department of Health, however, said they did not pay particular attention to Portopiccolo’s acquisition this year of Accordius Health at Courtland in Southampton County and Accordius Health at Waverly in Sussex County.
Such deals are “a business decision between the parties involved,” said Kimberly Beazley, director of the state Office of Licensure and Certification. “And we do not regulate business decisions made by facilities.”
Weeks with no hot water
Multiple employees at Portopiccolo-owned facilities, including one who worked in the kitchen at Chestertown, said their new managers had so much trouble filling staffing gaps this spring that employees were asked to work after learning they had the virus.
“It was a disaster,” said the Chestertown employee, who said she tested positive May 15 and declined when asked to come to work three days later. “People were still testing positive, and we were being asked to reapply for our jobs because this new company was coming in.”
Kent County Health Officer William Webb said local officials intervened that month after learning that a different employee at the facility who also had coronavirus was still working. “It was very concerning to me at the time, and we made sure to put a stop to it,” he said.
The facility’s water heater was broken from July to September, which meant there was no hot water for dishes or hand-washing. State inspectors fined the facility $730,000 for not fixing or reporting the problem, which they said posed “immediate jeopardy” to residents’ health. Collins said the firm is disputing the fine.
Webb said Peak’s decision not to promptly replace the water heater was “especially difficult” because the facility had seen scores of coronavirus cases and more than a dozen deaths in April and May. “If you’re in the business,” he said, “[you know] ample hot water is the core of any infection prevention program.”
When Peak took over managing the facility, roommates Patricia Sparkman, 82, and Brenda Middleton, 79, were isolated in their ground-floor room after testing positive for the virus.
Sparkman said in an interview that staff members left after the transition. Those who remained seemed less able to help, she said, including with basic tasks like bringing her water.
Middleton’s daughter, Tina Hurley, said the family moved Middleton a few months later to Peak Healthcare at Denton, about 30 miles away, so they could visit more frequently. But that facility had also been acquired by Portopiccolo on May 1.
Hurley said her mother is rarely checked on in Denton and has fallen several times while trying to get things for herself. At one point, she added, Middleton injured her leg but went without care from the facility’s doctor for days.
“I wouldn’t have brought her here if I knew how bad it would be,” Hurley said.
For Pearthree, the social worker at Sligo Creek, the breaking point came when she was asked to transfer back to Fox Chase in mid-May as director of social work. By then, Peak was operating both facilities.
She found residents she had known for years alone in their rooms, she said, confused and despondent in some cases. Relatives of those who died, she added, were given little information about how or when their loved ones had gotten sick.
When she raised concerns with managers, she said, she was brushed aside.
“The families felt betrayed by us,” Pearthree said. “And that was the part that overwhelmed me.” She sent a resignation letter in June.
Collins said Fox Chase administrators were unaware of her resignation and said Pearthree was terminated after she stopped coming to work. But the executive director of Fox Chase left Pearthree a voice mail on June 3 acknowledging her resignation and pleading with her to return.
“You do your job great and I like that,” the director said in the voice mail, which Pearthree shared with The Post.
Collins said that Portopiccolo leaders see their employees as “health care heroes.”
“We remain committed to putting care first,” he added.
Days before Thanksgiving, as all but one of the firm’s Maryland facilities reported new coronavirus outbreaks to the state, the firm closed on deals worth $37.7 million to acquire four more facilities in Florida.
Kennett Square, Pa.-based Genesis Healthcare, one of the largest post-acute care providers in the U.S., warned that bankruptcy is possible if its financial losses continue.
“The virus continues to have a significant adverse impact on the company’s revenues and expenses, particularly in hard-hit Mid Atlantic and Northeastern markets,” Genesis CEO George V. Hager Jr., said in a Nov. 9 earnings release.
Mr. Hager said government stimulus funds the company received in the third quarter of this year fell nearly $60 million short of the company’s COVID-19 costs and lost revenue.
Genesis said it has taken several steps to help offset the financial damage linked to the pandemic, including delaying payment of a portion of payroll taxes incurred through December.
But the company warned that bankruptcy is possible if its financial losses continue.
“Even if the company receives additional funding support from government sources and/or is able to execute successfully all of its these plans and initiatives, given the unpredictable nature of, and the operating challenges presented by, the COVID-19 virus, the company’s operating plans and resulting cash flows, along with its cash and cash equivalents and other sources of liquidity. may not be sufficient to fund operations for the 12-month period following the date the financial statements are issued,” Genesis said. “Such events or circumstances could force the company to seek reorganization under the U.S. Bankruptcy Code.”
Genesis ended the third quarter of this year with a net loss of $62.8 million, compared to net income of $46.1 million in the same period a year earlier.
HENRY KOTULA 