A.G. Schneiderman Announces $600k Settlement With Mid-Hudson Nursing Home Chain That Delayed Patient Discharges

Attorney General Eric T. Schneiderman recently announced that Elant, Inc., a Mid-Hudson area nursing home chain, will pay $600,000 to resolve claims that it delayed the discharges of short-term residents at its facilities. As part of a settlement, Elant admitted that between 2008 and 2011 it had a practice of postponing discharges of short-term residents who were clinically ready to leave Elant facilities against the wishes or without the informed consent of the residents or their families. Elant, which is headquartered in Goshen, also admitted that it orchestrated the transfer of several long-term residents to one of its financially-troubled facilities to improve that facility's financial condition.

"Nursing homes must not put their own financial interests above those of their residents – patients who rely on them for their care and treatment – and New York taxpayers," Attorney General Schneiderman said. "All nursing home residents have a right to accurate and complete information about their options. Indeed, they need that information to make informed decisions about their care. My office will find those who use patients to siphon off critical taxpayer funds."

"This settlement sends a clear and unmistakable message to those who seek to profit at the expense of vulnerable New Yorkers- and New York's taxpayers: you will be held fully accountable," said Dennis Rosen, Medicaid Inspector General.

The settlement agreement follows a joint investigation of Elant by the Attorney General's Medicaid Fraud Control Unit and New York State Department of Health. Elant currently owns six nursing homes in Orange, Dutchess, and Westchester counties, but it has announced plans to try to sell several of the homes.

In the settlement agreement, Elant admitted that senior managers directed nursing home administrators to limit the number of planned discharges of short-term residents to two or three residents per week. Most short-term residents at nursing homes receive physical or occupational therapy following events such as strokes or broken hips. Elant admitted that the purpose of the delays was financial and that the practices were primarily directed at residents with Medicare or Medicaid coverage. Elant also admitted that it prolonged short-term stays by giving residents additional services that were not clinically necessary, avoiding residents who were actively seeking discharge, and delaying the completion of discharge paperwork.

The investigation revealed that administrators and staff openly discussed efforts to delay discharges and thereby keep daily resident counts for each home, which were known as the census, as high as possible. For instance, one former senior executive told other executives by email, "We need to slow discharges across the system. I will send the message to Goshen but please let the other buildings know." Similarly, another senior executive sent an email with the subject line "Census" that stated, "As can be seen from this morning’s census report, we are down across the system. Please manage your census this week and whatever discharges can be avoided, please do so. Residents and families can be very obstinate." In emails, Elant personnel acknowledged that they were holding residents to help Elant's census. For example, one nursing home administrator began an update on discharges by noting, "We have held these discharges off in a number of cases due to low census." Similarly, in another email thread about census in one facility, an Elant administrator acknowledged, "we are really holding these people against their will."

The investigation also revealed that senior executives orchestrated the transfer of residents to Elant's financially-troubled facility in Westchester County, which used to be known as Elant at Brandywine. One such effort in early 2009 was designed to increase the number of residents in advance of two meetings between executives and members of Elant's Board of Directors. Elant targeted certain residents with Medicaid coverage for transfer.

In connection with the investigation, the Department of Health sought the revocation of the nursing home administrator licenses of two former Chief Executive Officers of Elant and two former administrators of Elant skilled nursing facilities. Both of the former CEOs have surrendered their licenses, as has one of the former administrators. The license proceeding against one of the former administrators is ongoing.

Under the settlement, Elant must undertake a series of steps to ensure residents' rights are protected. Specifically, Elant agreed to adopt new policies that include prohibitions on deceiving residents about their discharge options and restrictions on taking Elant's finances into account when discharging residents. The settlement also requires Elant to enter into a Corporate Integrity Agreement with the Office of the Medicaid Inspector General ("OMIG"). Corporate Integrity Agreements typically require an outside monitor to oversee the activities of an organization for several years. In addition, the settlement allows OMIG to prevent Elant from employing people who were involved in the schemes to delay discharges or improperly transfer residents.

The Attorney General would like to thank the Department of Health and the Office of the Medicaid Inspector General for their cooperation in connection with this case. About $275,000 of the settlement will resolve civil claims relating to Medicaid resident stays at Elant facilities under the New York False Claims Act and other laws. Elant will also pay about $275,000 in fines to the Department of Health. About $50,000 of the settlement will reimburse the federal Medicare program for discharges that were delayed.

The Medicaid Fraud Control Unit's (MFCU) investigation was conducted by Special Assistant Attorney General Christopher Y. Miller, Senior Counsel Carolyn T. Ellis, Investigators Kenneth Deis and Lisa McDonald, Investigator Peter Markiewicz, Deputy Chief of Downstate Investigations Kenneth Morgan, Medical Analyst Stephanie Keyser, Associate Special Auditor Investigator Meghan E. Collins, and Chief Auditor Michael LaCasse. MFCU is led by Acting Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney and is within the Division of Criminal Justice, which is led by Executive Deputy Attorney General Kelly Donovan.