Brius faces state audit

Brius will be the subject of a California state audit looking into the company’s business dealings with other firms owned by Brius CEO Shlomo Rechnitz and his family members.

By a vote of 12-0, the state’s Joint Legislative Audit Committee approved the audit Wednesday at the request of State Sen. Mike McGuire and Assemblymember Jim Wood.

Both legislators represent Humboldt County, where Brius controls every nursing home. Last year, the lawmakers successfully fought Brius from closing three of its five homes in the county without giving into the firm’s demand for higher reimbursements for Medi-Cal patients.

“Through that process we learned a lot about Brius, its ownership structure and business operating procedures,” Wood said in a prepared statement. “(That) compelled us to better understand the impact and appropriateness of what are called related-party transactions.”

State Sen. Mike McGuire and Assemblymember Jim Wood

Brius, which controls one of every 14 nursing homes beds in California, received over $507 million in Medicare and Medi-Cal funds in 2015 – more than 80 percent of its total annual revenue. An analysis of state data by the National Union of Healthcare Workers found that during the same year, Brius paid over $67 million to 65 companies controlled by Rechnitz or his relatives.

Meanwhile, over the past year, the California Department of Public Health has blocked Brius from taking over five nursing homes citing its poor patient care track record and fined one Brius home in Humboldt County $160,000 for violations stemming from failing to properly staff the facility.

“We commend State Sen. McGuire and Assemblymember Wood for requesting this audit,” NUHW President Sal Rosselli said. “With thousands of the California’s frailest seniors living in Brius homes, the state has an obligation to determine whether the company is spending taxpayer money as it was intended – to care for its residents.”

The California state auditor will examine data Brius reported to the Department of Public Health, Department of Health Care Services and Office of Statewide Health Planning and Development. The audit will also review current protocols for capturing transactions between companies with the same owner as well as the appropriateness of the transactions in order to ensure that services provided are fairly priced.

Several reports have already questioned whether Brius homes may be overpaying for rent and other services from Rechnitz-owned firms. For example, the North Coast Journal reported the following in 2016:

The disclosures include a section dubbed “related party transactions,” which describes financial interactions between parent companies and subsidiaries. Think of it as a kind of conflict of interest statement. In 2015, Eureka Rehabilitation and Wellness Center paid $42,000 to Boardwalk Financial Services, LLC for “administrative services.” The company employs Rechnitz as a consultant. It also paid $864,894 to lease the property. Who owns the property? Rechnitz. Eureka Rehabilitation and Wellness Center also paid $110,204 for medical supplies to TwinMed Medical Supplies and Services, owned by Shlomo Rechnitz and his twin brother, Steve. And it paid $47,663 to SR Capital, LLC, which lists Rechnitz as its managing member. Altogether, in the 2014-2015 fiscal year, as Rockport/Brius was playing a financial game of chicken with Partnership Healthcare and refusing to take in vulnerable seniors and people with disabilities, it managed to shunt more than $4.6 million back into companies affiliated with Shlomo Rechnitz.

While, on paper, the company may have lost money, Rechnitz still managed to profit. The amount he took in for lease payments alone in 2015 on the five properties — more than $3.5 million — was easily enough to cancel out Brius’ “unsustainable” combined loss of almost $1.5 million from the company’s Humboldt County holdings that year.

“As good stewards of state resources we must understand how Brius Healthcare and affiliated companies receive and invest Medi-Cal dollars,” McGuire said in a prepared statement.

Wood added, “This audit will investigate the inner workings and interrelated business relationships that exist in this industry and determine whether changes need to be made to protect the use of public funds for this vulnerable population.”

NUHW represents workers at two Brius homes in Marin County. Maria Martinez, who has worked as a nursing assistant for 27 years at the Brius-owned San Rafael Healthcare and Wellness Center, told Audit Committee members Wednesday in Sacramento that Brius “cut staffing levels, basic supplies and resources” when it took over the San Rafael home in 2012. “The quality of care for our residents has gone way down,” she said urging them to approve the audit. “We are understaffed almost every single day.”

Following this week’s approval of the audit request, the California State Auditor will now assign a team of auditors to carry out the investigation. The audit results will be published in 2018.

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NLRB strikes down Brius home’s ban on employee lawsuits

For the second time in seven months, a National Labor Relations Board judge has struck down a Brius home’s requirement that employees waive their right to take legal action against the company as a condition of employment.
Judge Ariel Sotolonga ruled last week that the Four Seasons Healthcare & Wellness Center in North Hollywood (Calif.) violated federal labor law by mandating that all employment disputes go to binding arbitration.
He also ruled that the home’s written policy illegally gave the impression that workers did not have the right to file complaints with the labor board, a federal agency charged with protecting employees’ rights.
The case involved Ana Cruz, a former Brius employee, who claims the Brius home violated laws governing minimum wage, overtime pay, and rest breaks.
Cruz filed a class action lawsuit in 2015 against Brius, but the company’s lawyers convinced a Los Angeles Superior Court judge to toss out her lawsuit based on Brius’ mandatory arbitration policy, which every employee was required to sign.
However, Judge Sotolonga ruled that the labor board has been clear that employers cannot bind workers to settle disputes through arbitration as a condition of employment.
He ordered the Brius nursing home to:
  • Rescind its mandatory arbitration policy
  • Inform current and former employees that the policy has been rescinded
  • Notify the superior court that it has rescinded the arbitration policy and no longer opposed Cruz’s legal action based on the policy.
  • Reimburse Cruz for attorneys’ fees and litigation expenses incurred in opposing Brius’ attempt to dismiss her lawsuit.
The ruling is nearly identical to a decision NLRB Judge Raymond Green issued last year invalidating a mandatory arbitration policy at Brius-operated Montecito Heights Healthcare & Wellness Center.
Although the National Labor Relations Board has been consistent in protecting workers from mandatory arbitration clauses, that protection is in jeopardy. Judge Sotolonga noted in his ruling that the U.S. Supreme Court is currently considering a case that hinges on whether employers can mandate arbitration to settle employee disputes. If the high court sides with employers, workers across the country may find themselves having to sign away their right to sue their employer as a condition of getting a job.

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Brius lawyer blames staffers for failing to file timely documents

Brius CEO Shlomo Rechnitz was always going to have a difficult task convincing California health officials to overturn a ruling that’s blocking his company from taking over five nursing homes.

Rechnitz’s own lawyer, however, has made that challenge even more difficult.

Last year, Rechnitz’ lawyer failed to submit a legal appeal to the California Department of Public Health, thereby triggering the department to issue a default decision against Brius.

In a recent court filing, Mark Johnson of the San Diego-based law firm Hooper, Lundy & Bookman claims he never saw the department’s “accusation,” for which he had 15 days to respond.


Johnson says his office was in the midst of changing procedures for handling incoming mail. He blamed everyone and everything for the error — except himself:

“Unfortunately, neither my support staff nor the docketing software recognized service of the accusation as triggering the 15-day deadline for filing a Notice of Defense,” he wrote.

After Johnson failed to file a timely defense, a CDPH officer issued a default decision upholding the department’s move to block Brius from operating the following nursing homes:

  • Anaheim Point Healthcare and Wellness Centre
  • Brookdale Healthcare and Wellness Centre
  • Chico Heights Rehabilitation and Wellness Centre
  • Chico Terrace Healthcare and Wellness Centre
  • River Valley Healthcare and Wellness Centre

Now, Johnson is asking for a second chance to file a defense for Brius.

Even if Brius prevails in getting a new hearing, it still has to defend its egregious failures to care for residents. In blocking Brius from taking over the facilities, regulators cited the company’s 386 serious patient care violations over the previous three years.

The CDPH’s action came one year after state Attorney General Kamala Harris filed an emergency motion in federal bankruptcy court seeking to block Brius from taking over 19 nursing homes. In court papers, she called Rechnitz a “serial violator” of nursing home rules.

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Another Brius home cited for poor patient care, expired food

A Brius home in the heart of Silicon Valley has been cited by state regulators for serving expired food and failing to properly care for one resident who suffered a severe pressure sore and another whose frequent falls resulted in a broken collar bone.

The California Department of Public Health’s annual inspection of the Cupertino Healthcare and Wellness Center earlier this year resulted in two Class B citations.

One citation concerns the care provided to a man admitted last September who suffered from dementia. Investigators found the facility failed to update a tool used to predict his risk of developing pressure ulcers. The patient ultimately developed an ulcer that measured roughly 5 centimeters in diameter and leaked a yellowish discharge on his bed linens.

The other citation involved a resident who suffered from dementia and frequent seizures. Despite knowing that she was a fall risk, the home’s administrators failed to provide her adequate assistance, which contributed to several falls including one that resulted in a broken collarbone.

The director of nursing acknowledged to investigators that the facility should have done more to prevent falls and provided therapy for the resident. The administrator also acknowledged that the resident could not reach her call light to request help and that there was no floor mat in her room to soften the impact of a fall from her bed.

Investigators also found that the home’s refrigerator was stocked with expired food.

These items included:

  • Cooked chicken
  • A desert tray
  • Pork sausage
  • A pitcher of apple juice
  • A pudding bowl
  • A tray of gelatin

Furthermore, most food items in the freezer and pantry did not have expiration dates, which an administrator acknowledged violated the facility’s rules. Cupertino is not the first Brius home to have been found serving expired food. An inspection of the San Rafael Healthcare and Wellness Center two years ago turned up expired food in the kitchen pantry including “thickened apple juice.”

Not surprisingly, residents complained about the food quality in Cupertino.

One resident said the food “tasted bad and was always served cold,” investigators wrote. Another resident said the food was so bad she had to ask a relative to bring in food.

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Brius nursing home cited in resident death

State regulators have slapped a Brius nursing home with a severe patient care citation for leaving a 59-year-old obese, mentally ill resident in a prone position on her bed where she was later found dead.

Vernon Healthcare Center – one of the most troubled nursing homes run by Brius CEO Shlomo Rechnitz — received the Class A citation in March 2017, according to a California Department of Public Health citation obtained by Brius Watch. The agency has not yet announced financial penalties for the violation, which is the second most severe class of citations available to state regulators.

Investigators found that the nursing home repeatedly failed to follow protocol in caring for the patient, who experienced a “behavioral episode” the day before her death during which she began screaming and fell off her bed three times.

The facility failed to have a nurse assess her sudden deterioration or alert her doctor as required. Investigators also determined that staffers “did not receive appropriate training to manage a behavioral episode of a mentally ill, obese resident.”

Moreover, administrators at the home were unaware that the death merited an investigation and autopsy. The investigators wrote:

“When asked if the Director of Nursing knew that the resident was found not breathing and pulseless in a prone position, she answered, “Really?” Who told you that?”

The facility’s medical director told investigators he failed to investigate the death or request an autopsy because he was never informed that the resident was lying in a prone position when she was found unresponsive.

The Vernon facility is no stranger to major violations. Two years ago, the CDPH slapped it with a Class A citation and $20,000 fine for failing to provide adequate supervision and assistance to a nursing home resident that was at high-risk for falls.

That same year, the agency also fined it $60,000 for another Class A citation for failing to provide adequate supervision and assistance to a nursing home resident with a history of wandering behavior.

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Nursing home magnate loses bid to transfer case from Humboldt County

A Humboldt County judge denied Brius CEO Shlomo Rechnitz’s bid to transfer jurisdiction of a wrongful death lawsuit to Los Angeles, rejecting a Rechnitz’s claim that he couldn’t get a fair trial in Humboldt.

Judge Timothy Cessna ruled that Brius failed to show that a Humboldt jury would show bias towards the company that controls every skilled nursing facility in the county, the Eureka Times-Standard reported.

Rechnitz, a Los Angeles billionaire, had argued that “negative” reports of the company’s failed attempt last year to close three of its five nursing homes in the county and potentially force residents to transfer far from their families, would prevent him from getting a fair trial.

Local officials had accused him of using the planned closures as bargaining chips to force authorities to boost his Med-Cal reimbursements. Rechnitz’s lawyers even noted that the North Coast Journal had ranked his closure ploy as Humboldt County’s top “Dick Move” of 2016.

The case was filed by relatives of  Ralph Sorensen who was admitted to Eureka’s Seaview Rehabilitation and Wellness Center, where he developed a pressure sore that became infected and ultimately led to his death last year.

The Sorensen case is just the start of Rechnitz’s legal troubles in Humboldt. He is facing several lawsuits including one filed on behalf of a man whose sister alleges he was discharged from a Eureka nursing home and dumped at a hotel where he died four days later and another filed on behalf of a man who also died after developing pressure sores that became infected.


Brius workers demand contracts

Workers at two Brius-controlled nursing homes in Marin County traveled to Oakland Wednesday to surprise their bosses with new contract proposals that include raises and increased staffing to improve patient care.

The workers at the San Rafael Healthcare and Wellness Center and the Novato Health Center are represented by the National Union of Healthcare Workers. San Rafael workers have gone over three years without a contract. Novato workers are seeking their first contract after 18 months of Brius stonewalling. Janitors and housekeepers at the facility make less than $11.30/hour.

With Brius CEO Shlomo Rechnitz far away in Los Angeles, the workers paid an unexpected visit to the Oakland office of Rockport Healthcare Services, which manages the homes.

Members handed their proposals to Wesley Rogers, a Rockport executive.

Then they rallied outside:

Here is a quick video of the action:

California ruling threatens Brius expansion

Brius has mounted an 11th-hour challenge to a ruling by California regulators that denied the company licenses for five nursing homes and effectively has halted the company’s rapid expansion across the state.

Last July, the California Department of Public Health (CDPH) denied Brius licenses to operate the facilities citing the company’s 386 serious patient care violations over the previous three years. Brius lost its first appeal in December after it failed to provide to provide legal documents ahead of deadlines, triggering a “Default Decision” against it.

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On May 17, attorneys for Brius asked a judge with the Office of Administrative Hearings and Appeals to overturn the Default Decision and reinstate its appeal. A ruling is expected later this year.

The facilities in question are:
Anaheim Point Healthcare and Wellness Centre
Brookdale Healthcare and Wellness Centre
Chico Heights Rehabilitation and Wellness Centre
Chico Terrace Healthcare and Wellness Centre
River Valley Healthcare and Wellness Centre

Brius is currently operating all of them while it exhausts its appeals process. Should the ruling stand, it could have major ramifications for the company, which has emerged over the past decade as California’s largest nursing home operator, accounting for one-in-14 beds.

Brius’ expansion plans were challenged in 2014 when California Attorney General Kamala Harris filed an emergency motion in federal bankruptcy court seeking to block the company from taking over 19 nursing homes. In court papers, she called Brius CEO Shlomo Rechnitz  a “serial violator” of nursing home rules.

If the CDPH’s denial is upheld, Rechnitz may find himself unable to win approval for new nursing homes in California. In denying his applications last year, state regulators noted that 38 of Brius’ 386 patient care violations put patients in “imminent danger” of death or serious harm. Altogether, 265 of the 386 violations were at a scope and severity level of F or higher, indicating more serious and widespread violations.

There is no reason to think that the CDPH would soon become more amenable to the prospect of Rechnitz taking over additional facilities.

In fact, Rechnitz may have reached the same conclusion as he has already begun expanding into Nevada and Texas.

Brius faces new lawsuit amid state fines for understaffing Humboldt county facility

A Humboldt County woman is suing Brius Healthcare and its CEO Shlomo Rechnitz for elder abuse after she fell multiple times in a Brius-operated nursing home, fracturing her arm, neck and wrist.

The lawsuit, filed earlier this month on behalf of Marie White, alleges that Rechnitz endangered the health of White and other residents by intentionally understaffing the Eureka Rehabilitation and Wellness Center to boost profits.

White, according to the lawsuit was one of several patients referenced in a recent California Department of Public Health inspection that resulted in a $160,000 fine against the 99-bed nursing home in part for failing to provide adequate staffing to prevent falls. The report quoted an unnamed worker who said company officials increased staffing levels when state inspectors were present in an apparent effort to conceal the facility’s under-staffing.

In court papers, White’s attorney, Stephen Garcia of the firm Garcia, Artigliere, Medby & Faulkner, alleged that the home admitted White knowing she suffered from dementia and was prone to falling, but nevertheless failed to provide the care she needed.

White fractured her left arm last year after falling when walking unassisted to the bathroom. The nursing home “concealed” the injury and White’s subsequent 24-pound weight loss from her relatives, according the lawsuit.

White fell again on Jan. 26, 2017 while “left completely unattended” in the bathroom “striking her head on the toilet and sustaining a fractured neck and wrist,” Garcia wrote in court papers.

White was one of several patients who suffered preventable falls at the under-staffed facility, according to citations issued by state investigators on Feb. 28, 2017.

  • A resident suffered eight falls in less than four months, and had to be taken to a hospital for treatment.
  • A resident fell six times from May through December of 2016. In one instance, the resident was “found in the bathroom sitting on the floor wet with urine.”
  • A resident suffered six falls from August through October of 2016 including one that resulted in a broken nose.
  • A resident fell six times from May through November of 2016, including one fall that required stitches to close a head wound.

After interviewing several caregivers and residents, investigators from the California Department of Public Health determined that the facility had “failed to ensure adequate nursing staff to provide quality care.”

One caregiver told investigators that the facility “needed to have more staffing on the B Wing, because there were lots of confused residents who required more help and care.” Another caregiver said the facility had reduced staffing on the B Wing and that because of short staffing he “could not do things for the residents as he wanted to do (i.e brush their teeth, wash their hands, give a bed bath…)”

One resident told an investigator she sometimes had to wait up to 30 minutes for a staffer to help her go to the bathroom.

With the arrival of state investigators, however, staffing levels suddenly increased. A caregiver told investigators that she typically had 12 patients per shift, but had only eight residents that week “because the state was there.”

Investigators analyzed the “routine care tasks” performed by Certified Nursing Assistants during their work shifts, and learned that caregivers said they were assigned up to three times the amount of work that could possibly be completed during a shift.

However, the Brius nursing home administrator insisted there was no staffing problem, even though she acknowledged that one Certified Nursing Assistant had to care for more than 15 residents on a night shift. Questioned about the facility’s action plan for staffing, she told investigators there was no plan “because the facility did not have staffing problems.”

In court papers, Garcia insisted the home was under-staffed as part of Brius’ “plan to cut costs at the expense of the residents…” The under-staffing, he added, “was designed as a mechanism to reduce labor costs and … resulted in the wrongful withholding of required services to many residents of the facility, and most specifically, Marie White.”

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Brius workers fight back against under-staffing

Caregivers at two Brius-operated nursing homes in Marin County sent a message to CEO Shlomo Rechnitz that he must stop under-staffing his homes and start treating his employees and patients with dignity.

More than 30 caregivers and their allies picketed Sunday outside the San Rafael Healthcare and Wellness Center. Patients and nearby residents thanked workers for taking a stand, and Marin County Supervisor Damon Connolly manned the picket line along with representatives of the Marin Association of Public Employees.

San Rafael caregivers, who are represented by the National Union of Healthcare Workers, have gone more than three years without a contract. During that period state regulators have cited the facility for stocking expired food, admitting residents during a Norovirus outbreak and supplying so few towels and wash cloths that caregivers have had to dry patients with paper towels and bed linens.

Nevertheless, Brius’ recent “last, best and final offer” included cuts to dental benefits and no provisions to increase staffing levels. Caregivers earlier conducted a two-day strike to protest under-staffing that jeopardized patients’ safety and care. Brius management responded by locking out workers the following day.

NUHW-represented workers at the Novato Healthcare Center took their own stand against Brius’ chronic understaffing. With state regulators expected to inspect the facility last week, they informed management in mid-April that they would not work any voluntary overtime from April 29 to May 6.

A nursing home shouldn’t depend on its employees to work extra shifts simply to meet minimum staffing levels. But we’re told that Brius had to bring in at least 20 temporary certified nursing assistants just to keep the nursing home running without its workers completing overtime shifts.

Brius even offered $165 bonuses to work overtime shifts, but workers stood firm.