In a rare case in which a nursing home business faced criminal charges over staffing misconduct, two Pennsylvania facilities owned by Comprehensive Healthcare Management Services were recently found guilty of healthcare fraud and other crimes.
Prosecutors alleged two different schemes to enrich the nursing homes’ operations. In the first, leaders were accused of falsifying payroll documents to make it appear the nursing homes were meeting required staffing levels, including having non-working direct care staff clock in for shifts they never intended to work. In the second, administrators were accused of changing assessments to make it appear patients were clinically depressed or needed more therapy as a means of delaying discharge and driving Medicare or Medicaid reimbursements.
Both schemes appear to be occasional, if not common, practice of some nursing homes. The Trump Administration, for example, began demanding payroll records of nursing homes, because CMS found that some nursing homes misrepresented staffing levels on routine reports. Moreover, the financial incentive of these institutions to misrepresent a patient's condition or need for treatment, underlies many of the ongoing battles to ensure better quality of care for patients.
After five weeks of testimony in the complicated case involving Brighton Rehabilitation and Wellness Center and Mt. Lebanon Rehabilitation and Wellness Center, the jury returned verdicts against the institutions charged. The US Attorney’s Office for the Western District of Pennsylvania also prosecuted five company and facility leaders for their roles in a scheme that led to overbilling; the jury found all five not guilty.
Brighton Rehab itself was found guilty of healthcare fraud and five counts of falsification of records in a federal investigation, while Mt. Lebanon was found guilty of one count of falsification of records related to healthcare matters and three counts of falsification of records in a federal investigation. The nursing home defendants are scheduled to be sentenced in May before US District Judge Robert J. Colville.
According to Kimberly Marselas, reporting for McKnights' Long Term Care News, neither prosecutors nor defense attorneys offered a solid explanation why the jury reserved its convictions for the corporate defendants. US Attorney Eric Olshan, nonetheless, assured told McKnight’s Long-Term Care News that his office would pursue similar cases in the future, if warranted:
“Our legal system entrusts the jury with making determinations of guilt, and as in all cases, we respect the jury’s verdict. Today, the jury held the two corporate defendants criminally liable for a total of 10 counts of making false statements and obstructing CMS’s critically important work of ensuring that nursing facilities comply with the law. This office and our law enforcement partners will continue to seek accountability for any individual or business that pursues profit through deceit and does so at the expense of vulnerable members of our community.”
Several counts in the indictment carried up to $250,000 in fines, or jail times in the case of individuals. In a press release issued by the US Attorney’s Office , prosecutors said the companies faced a maximum of five years probation, $500,000 in fines, or both, on the counts for which they were convicted.
"Brighton, with 589 beds, is one of the state’s largest nursing homes and was plagued by problems during the pandemic. The facility was hit with at least $62,000 in fines for infection control deficiencies, and the state later selected a temporary manager to come in and clean up operations.
The 121-bed Mt. Lebanon facility also has had its share of problems, including a 2-star overall rating and an abuse citation noted on the Care Compare site.
Both facilities are managed by Comprehensive Healthcare Management Services, an entity affiliated with Ephram “Mordy” Lahasky. He has a 10% direct ownership stake in Brighton, while Halper has a 12% ownership stake.
Attorneys for the individual defendants framed the case as one of sloppy record keeping and government malfeasance, rather than intentional fraud, TribLive reported. The Pittsburgh Tribune-Review reported that attorneys also attacked the credibility of 20 former nursing home employees as each having an axe to grind: some were fired, others quit, and some were offered immunity in exchange for their testimony.
Attorney Kirk Ogrosky represented Sam Halper, Brighton’s CEO and 12% owner and an officer at Mt. Lebanon. Orgosky argued there was no evidence Halper was involved in ordering or completing incorrect staffing records but instead told the jury that a handful of staff members came up with a scheme to cheat the buildings’ corporate owners.
“Throughout this case, all defendants cooperated with the US Department of Justice in every way possible. Yet, DOJ pursued individuals without regard for the truth,” Halper said in a statement shared with TribLive. “Thankfully, the jurors were able to hear the evidence and find that the facts did not support DOJ’s claims.”
Regardless, the case is representative of just how complicated is the challenge to ensure care quality, and just how difficult it can be for the government, even when properly motivated, to protect the vulnerable by holding third parties responsible. Individuals and institutions pursuing their own self interest at the expense of senior residents and patients is a common theme in cases like the one reported.
Of course, the case does not ask or resolve the question of whether a health care system devised and regulated by a government bureaucracy overly concerned with reducing costs at the expense of quality can ever attain a high quality of care for patients. Aging in Place is a discreet goal of a well-crafted estate plan because a person with family and loved ones can often better control the circumstances of their care at home or at less institutional alternatives.
