Tax Dollars to Corporate Criminals

Follow the Money

Nursing home companies sued for fraud or accused of wrongdoing received more than $300 million in coronavirus aid. The Washington Post reported that bad actors and corporate criminals in the industry got hundreds of millions of tax dollars. In fact, dozens of nursing home operators accused of illegal acts received funds.  The illegal acts include Medicare fraud, kickbacks, labor violations or failures in patient care. The Post analyzed where the money went and to whom.

This tax money from the federal government was meant to help pay for shortfalls amid the coronavirus pandemic, not fines and settlements for past bad acts. HHS opted for a simple distribution formula: Nursing homes would receive a $50,000 lump-sum payment, along with an additional allocation of $2,500 per bed. The average distribution was $315,000, with some larger facilities receiving $3 million or more, according to HHS. As the money became available, LeadingAge, an industry group that represents nonprofit providers, put out a primer for providers with detailed instructions about how to access and use the payments.

No Strings Attached

This money came with “no strings attached” to cover shortfalls and expenses during the pandemic. Industry lobbyists which represents 14,000 long-term-care providers said the federal money was needed because the industry was “on the verge of collapse” because their neglect and failure to prepare caused a loss of existing and potential residents. Agreements between the providers and HHS include language prohibiting nursing homes from using the federal money for abortions, gun-control lobbying and the purchase of chimpanzees. These agreements do not require homes to spend on safe staffing, personal protective equipment or hazard pay for caregivers. Providers could use the grants for a range of expenses, including insurance, rent or mortgage payments, and lease payments.

Millions more went to nursing homes with widely publicized breakdowns during the pandemic. Nursing home companies will seek to grow profit rather than direct money to patients and caregivers. Some providers have affiliated entities, such as management companies, landlords, and medical supply companies, that could charge related nursing homes above-market rates for goods and services to justify expenses. Last month nearly 3,000 reported shortages of nurses, aides or both, according to CMS data. More than 1,700 reported that they lacked a week’s supply of N95 masks; 1,500 said they lacked surgical gowns. Staffing is an unsafe as ever.

Instead, they use the money to settle civil lawsuits with the Justice Department, which alleged improper Medicare billing, forged documents, substandard care and other abuses. Nursing homes will receive $4.9 billion total out of a $175 billion Provider Relief Fund. The companies repaid the government a total of more than $260 million. Almost all are under active Corporate Integrity agreements with the government.


Consumer advocates, watchdog groups and industry experts say the government should have assessed the financial needs of the nursing home industry, scrutinized the track records of providers and attached some spending restrictions before distributing the payments. They say they are most concerned about for-profit companies, some owned by private equity and other investment firms, that in the past have slashed costs and cut staff to boost profit. Those familiar with the industry say they fear some companies will simply absorb the money without investing in patient care or compensation for front-line workers.

SavaSeniorCare received at least $65 million in relief aid. In the past, they entered an agreement after a kickback scheme with OmniCare. Now, the Justice Department in federal court in Tenesse is pursuing a case against SavaSeniorCare. Justice argues that the billion dollar chain pressured its homes to meet “unrealistic” financial goals by submitting false claims to Medicare for rehabilitation therapy. The Trump Administration accuses SavaSeniorCare of placing vulnerable adults in danger with unnecessary and expensive services. The allegations include delaying the release of patients to reap higher Medicare payments. Why do our tax dollars go to these people?

The Investigation

According to HHS, providers who receive money will have to report spending and undergo audits. They could be forced to pay back funds not used for expenses or lost revenue. Rep. James E. Clyburn, D-S.C., launched a congressional investigation in June.

“Our committee intends to conduct rigorous oversight to ensure that nursing home companies that received funds in order to deal with the crisis spend those funds as Congress intended,” he said in a statement to The Post. “Nursing home companies that received funds after committing fraud warrant particularly close scrutiny.”

They should have specified that the money couldn’t just be used for administrative costs and profits,” said Charlene Harrington, a nursing home expert, researcher and professor at the University of California at San Francisco. “There was no reason that CMS couldn’t have put more restrictions on the money.”

Meanwhile industry lobbyists are pushing for blanket immunity and more money. Trump announced an additional $5 billion in funding for nursing homes last month. I hope they plan on using it to stop the spread of the Trump Virus. Patte Packey, whose 83-year-old father died of covid-19 at a Sava nursing home in Bethesda, Md., said she worries the money will not be spent on patient care.

Who’s responsible for the oversight?” she said.

If you have any information about SavaSeniorCare, please give us a call.  We are here to help.