Nursing home owners and operators and their trade associations argue that they need more money to provide care to residents. Litigation against and by Centers Health Care, a New York State-based nursing home chain, shows a different story: how much money facilities receive and how they divert it from resident care to excessive private profit.
In a 316-page Petition filed June 28, 2023 under state law, New York State Attorney General Letitia James sued Centers Health Care, four of Center’s 38 nursing facilities in New York State, Center’s Chief Executive Officer Kenneth Rozenberg, Center’s Chief Financial Officer Daryl Hagler, limited liability companies that operate the four nursing facilities, and various relatives of Rozenberg and Hagler, among others. The Petition charges that, as early as 2013 and continuing to the present time, Respondents committed financial fraud, misused public funds, violated state nursing home regulations, neglected residents, grossly understaffed the four facilities, “repeatedly and persistently violat[ed] infection control regulations,” and converted for their own profit more than $83 million of the facilities’ Medicare and Medicaid reimbursement. Both the Petition and the Press Release contain disturbing photographs of residents’ pressure sores and other wounds.
All four Centers Health Care nursing facilities are also plaintiffs in a lawsuit filed in 2021 by more than one-third of New York State’s 615 nursing facilities, challenging a New York State budget law that (1) requires nursing facilities to spend 70% of their revenues on resident care (including 40% on resident-facing care) and (2) limits facility profits to 5%. In Home for the Aged of the Little Sisters of the Poor v. Mary T. Bassett, plaintiff facilities claim that nursing facilities would have had to return $824 million to New York State if the budget law had been in effect in 2019.
Paragraph by paragraph, the Complaint identifies the specific amounts that each plaintiff facility claims it would have been required, individually, to return to New York State if the budget law had been in effect in 2019.
Four Centers Health Care Nursing Facilities; Sued by State Attorney General and
Also Plaintiffs in Industry Lawsuit
|Name of facility||Paragraph in Little Sisters of the Poor Complaint||Amount of refund to state because of 70/40 requirement (if budget law had been in effect in 2019)||Amount of refund to state because of 5% limit on profits (if budget law had been in effect in 2019)|
|Beth Abraham||124||$1,415,432||Not specified|
|Buffalo Center||48||$4,975,291||Not specified|
|Martine Center||93||$2,275,405||Not specified|
By their own admissions, these four nursing facilities did not spend $13,577,498 on resident care, as defined by a later state budget law. How much additional money for care would Center’s 34 other New York nursing facilities have had if the budget law had been in effect in 2019 and enforced? How much additional care would $83 million have covered if the public reimbursement had not been diverted to private profit, as the Attorney General alleges in her June 2023 lawsuit?
Claims by nursing home representatives that they are underpaid and need more public reimbursement should be rejected as untrue. As relatives and friends of residents and as taxpayers, we all can, and should, demand that nursing facilities spend their reimbursement on care.
August 3, 2023 – T. Edelman