California Legislation Targets Brius

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Last year, Humboldt County residents learned that when a single company monopolizes an entire county’s nursing home beds, patients are at its mercy. Now, the county’s representative to the California Assembly, Jim Wood, is championing legislation that would limit the power of nursing home conglomerates to move patients far from their loved ones.

Last week, Wood introduced Assembly Bill 275 in response to Brius Healthcare’s bid last year to close three of its five nursing homes in Humboldt County. Brius, the largest nursing home operator in the state and the only one in Humboldt, threatened to force nearly 200 elderly and frail patients out of the county in what critics said was a ploy to boost the company’s Medicaid reimbursement rates.

After a four-month stand-off with local officials and patient allies, including the California Association for Nursing Home Reform and the National Union of Healthcare Workers, Brius CEO Shlomo Rechnitz backed down and agreed to close only one facility without forcing any residents of the county and away from their loved ones.

The episode was “a roller coaster ride of anxiety” for patients and their families, Wood, the Assembly Health Committee chairman, said upon introducing the legislation last week. “It became obvious to me that new protections would have to be put in place to prevent this trauma from happening to other residents in the future.”

Wood’s bill would strengthen patient safeguards and empower state regulators to protect patients and prevent operators from simultaneously closing multiple homes in one community.

Rather than merely being able to accept or reject an operator’s closure of a nursing home, Wood’s bill gives the California Department of Public Health the authority to require operators to adopt specific measures to “help prevent possible resident transfer trauma.”

If an operator is proposing to close two or more nearby facilities simultaneously, the department would be authorized to deny approval and “require the facilities to resubmit their closure plans with different timelines.”

The bill also:

  • Increases from 30 days to 90 days the advance notice that operators must give to residents prior to closing a facility.
  • Requires that patients being forced to relocate are assessed by a doctor and a mental health clinician.
  • Mandates that operators closing two or more facilities within a six-mile radius conduct a “Community Impact Report.” The report would include the number of affected residents; the number of nearby nursing homes; the reason for the closures; the number of residents who could potentially experience transfer trauma; and the number of residents who are taking psychotropic medications, diagnosed with dementia or under conservatorship.

California inspectors flunk Brius kitchen in San Rafael

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Brius’ San Rafael Wellness & Healthcare Center is located in one of the state’s wealthiest counties, but like many nursing homes operated by Brius CEO Shlomo Rechnitz, it can’t pass a basic health and safety inspection.

The latest issue surrounds it serving expired food to residents. Last year, the California Department of Public Health issued a 45-page report citing the nursing home for stocking its kitchen with expired food including six boxes of “thickened apple juice” that had been expired for nearly four months.

Inspectors also found bagels that had had been expired for more than a week and five bags of dry beans and three bags of chicken flavor stuffing that been expired for 18 months.

Not only were the food temperature logs and kitchen cleaning logs incomplete, but inspectors found that they were covered with a “thick black sticky substance.”

The facility was also cited for its failure to “employ a qualified dietitian” to manage its dietary services.

Today, as the state is reportedly preparing to cite the nursing home for more violations discovered during a subsequent inspection, issues with the kitchen have still not been fully resolved, according to caregivers.

This is hardly the first time that state regulators have cited the San Rafael facility, where Brius has refused to adopt caregivers’ proposals for improved staffing levels and other reforms designed to improve residents’ care and daily lives. In 2014, the facility was cited for being understaffed and under-resourced. Among the items in short supply were gloves and underwear.

Another 2014 report found that the linoleum floor had missing sections and the wooden handrail next to the bathroom was splintering. One resident described the facility as a “slum.”

The next year, inspectors cited the facility for continuing to admit patients during a norovirus outbreak. According to state records, the new patients soon were showing signs of being infected with the virus, which causes fever, vomiting and diarrhea.

When questioned by inspectors about admitting the patients, facility managers responded: “We have already taken the hit financially,” according to state records. Those mangers initially told inspectors that the new patients were admitted to a separate ward, but when pressed for floor plans, they admitted no such ward existed.

Report: California low-balling nursing home penalties

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How can Shlomo Rechnitz and Brius Healthcare assemble a stable of 81 California nursing homes while racking up 386 health and safety violations over a recent three-year period?

The answer may be found in a report issued last week by Disability Rights California. The nonprofit concluded that the state often issues strikingly different penalties for seemingly identical violations and often declines to seek the maximum penalty for nursing homes found to have violated safety rules.

Issuing lower-level penalties helps unsafe facilities stay open and deprives the state of lost fine revenue, the report found. And it keeps patients and their families in the dark about the safety risks posed by certain facilities.

The Sacramento Bee highlighted one of Rechnitz’s nursing homes to illustrate this practice in its article detailing the report.

In 2010, Armando Reagan was rushed from Rechnitz’s Vedugo Valley Skilled Nursing & Wellness Centre in suburban Los Angeles to a hospital bleeding from bedsores in his groin. Within an hour, he was dead.

Instead of issuing Verdugo Valley the harshest punishment – A Type AA citation and a $100,000 fine, the California Department of Public Health issued a milder Type A citation and a $20,000 fine.

That decision had consequences, the Bee noted, because Verdugo Valley had already received a AA citation in 2009. Had Reagan’s death in 2010 also resulted in an AA citation, the state would have had to revoke or suspend the facility’s license.

Instead, the facility remained open and was later hit with another AA citation in connection with the 2014 death of James Populus.

In fact, Disability Rights California found that state regulators classified more deaths as Class A Citations than Class AA citations between 2000 and 2014.

Insurer sues Shlomo Rechnitz in connection with Los Angeles nursing home death

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Shlomo Rechnitz’s nursing home just outside Glendale, Calif. has been fined, charged with involuntary manslaughter and indicted by a Los Angeles Grand Jury stemming from two patient deaths.

Now the company that insured the home is suing Rechnitz, the state’s largest nursing home operator, accusing him of omitting those facts when he applied for an insurance policy.

The lawsuit filed in federal court late last year by the Michagan-based firm ProAssurance could prove costly to Rechnitz, a billionaire, who recently found himself knee-deep in a Ponzi scheme.

ProAssurance is asking a federal judge to rescind its policy for Verdugo Valley Skilled Nursing & Wellness Center, LLC – a subsidiary of Rechnitz’s Brius Healthcare Inc., which controls one out of every 14 nursing home beds in California. ProAssurance is also asking the judge to declare that it has no duty to pay up if Rechnitz and Verdugo Valley lose an ongoing wrongful death lawsuit.

That could leave Rechnitz on the hook for any damages a jury awards to Carl Populus, whose 58-year-old brother James Populus died after receiving “grossly negligent” care at Verdugo Valley three years ago, according to a 2015 investigation by state Attorney General Kamala Harris.

The investigation found that the facility’s failure to provide proper medical care  led Populus to suffer “severe weight loss, sepsis and pneumonia.”

When a nurse reported that Populus had become verbally unresponsive and had a weak pulse, facility managers waited over an hour to call for an ambulance, according to court papers. Populus died at a nearby hospital six days later of “multiple system failure due to sepsis” with infections throughout his body, state investigators determined.

Prosecutors also filed felony abuse charges against two nurses at the facility.

Yet, according to court papers, Rechnitz’s facility answered “No” on its insurance application when asked by ProAssurance if it had ever been “the subject or investigatory or disciplinary proceedings or reprimanded by an administrative or governmental agency or professional association.”

The facility also made no mention on the application that the California Department of Public Health had issued it a Class AA Citation and a $100,000 fine in 2009 in connection to the suicide of 34-year-old Charles Morrill.

The CDPH later reduced the fine to $45,000, but a grand jury in Los Angeles County indicted the facility alleging that it had permitted Morrill to suffer “unjustifiable physical pain and mental suffering.” It further held that the home was complicit in Morrill ending his life by discharging a fire extinguisher down his throat.

Rechnitz still owns Verdugo Valley, but last year state regulators rejected his bid to buy five more nursing homes. They cited records showing that  his homes had racked up 386 serious violations over the previous three years — none more serious than the death of  Populus.

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Shlomo Rechnitz: Humboldt County’s #1 bad apple of 2016

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The North Coast Journal showed some alt-weekly moxie this week when it released its “Top 10 Dick Moves” of 2016.

To the surprise of no one who’s been following the news in Humboldt, the winner was Shlomo Rechnitz, the billionaire nursing home magnate, who owns all five nursing homes in the county.

Rechnitz’s firm, Brius Healthcare, threatened to close three of those homes, forcing patients to be transferred out of the region and away from their families.

Rechnitz claimed he was losing money, albeit not as much as he appears to have lost in a ponzi scheme. 

Still, the Journal did some digging that showed Rechnitz appearing to overcharge his nursing homes for supplies and rent. Of course, he owned the supply company and the buildings.

Ultimately, Rechnitz said he would only close one nursing home, and politicians pondered how to keep monopoly operators like Rechnitz from exploiting patients. Here’s what State Sen. Mike McGuire told the Journal earlier this month.

“Our early thoughts are that there should be a separate standard and additional oversight if there is a monopoly in one market. What we discovered is that the way the law is written now, all the power is in the hands of the operator.”

And here’s what the Journal had to say about that operator:

1. Shlomo Rechnitz

We have a winner. The game of chicken this out-of-area billionaire played with skilled nursing facilities — threatening closure in a bid for more state cash — was a greed-driven dick move that jeopardized some of the most vulnerable members of our community: the elderly he is charged with caring for. F**k that guy.

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Report: Shlomo Rechnitz invested millions in Madoff-like ponzi scheme

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It looks like  Shlomo Rechnitz might have gotten a taste of his own medicine.

For years, Rechnitz has collected millions in taxpayer money to operate the biggest stable of nursing homes in California while racking up so many health and safety violations that federal regulators decertified three of his facilities and state regulators this year rejected his attempt to buy five more.

Last week, however, the Wall Street Journal reported that Rechnitz appeared to be on the losing end of what federal investigators say is one of the biggest investment frauds since Bernard Madoff’s ponzi scheme.

The firm in question, Platinum Partners, was a hedge fund that had more than $1 billion under management, the paper reported.

According to the Journal, a person familiar with the scheme said that Rechnitz, who the paper described as a “billionaire nursing home magnate”  —  “had tens of millions of dollars tied up in Platinum and related deals.”

Prosecutors had already charged Murray Huberfeld, an associate with the hedge fund, with two counts of fraud, the New York Times reported in June. Those charges were in connection with allegations that he offered kickbacks to the head of New York City’s prison guard union in return for investing union funds in the hedge fund.

And guess who delivered the $60,000 in cash to the union president in a Salvatore Ferragamo bag, according to The Times? Rechnitz’s cousin, Jona Rechnitz.

So it looks like Shlomo Rechnitz might have gotten himself knee-deep in a ponzi scheme orchestrated by a hedge fund for which his cousin was soliciting business. Joan Rechnitz has already pleaded guilty in connection with the case and is cooperating with authorities, the Times reported.

As for Shlomo, The Journal reported that he’s had to cut down on some charitable giving in Israel, but the paper was silent on what this could mean to the mostly poor, elderly Californians who stay in his nursing homes.

 

 

Skimming off the poor: How Shlomo Rechnitz and Brius maximize profits

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Anti-Brius protester holds sign that reads “Shlomo’s greed will kill.”

When nursing home magnate Shlomo Rechnitz threatened earlier this year to close three of his five skilled nursing facilities in Humboldt County, he insisted they were losing money.

But a story in this week’s North Coast Journal sheds some light on how Rechnitz, a Los Angeles billionaire, squeezes big-time profits out of nursing homes that show losses on paper. It’s called self-dealing.

Through his company, Brius Healthcare, Rechnitz is the largest nursing home operator in California, controlling one out of every 14 beds. But he also owns a nursing home supply company and several of the buildings that house his facilities, including the five in Humboldt County, where he has monopoly control.

The Journal story found evidence suggesting that Rechnitz over-billed his Humboldt nursing homes for supplies and charged at least one of them exorbitant rent. The upshot is the nursing homes struggle on paper, while Rechnitz profits.

“According to documents available through the California Department of Public Health, Brius facilities in Humboldt County reduced admissions by 30 percent from 2014 to 2015. But, curiously, the amount spent on medical supplies jumped.

(State) records show Humboldt facilities purchased $117,000 more in “routine supplies” from TwinMed, Rechnitz’s company, in 2015 than it had the previous year, when it had more patients.”

A spokesman for Rechnitz didn’t comment on the expenditure or this additional tidbit from the Journal story.

Eureka Rehabilitation, a Rechnitz-owned home with 99 beds paid $95,367 to TwinMed for “routine supplies” between November 2014 and October 2015. During that same period, Broadway Villa, a 144-bed nursing home in the city of Sonoma, spent just $22,376 on patient supplies.

Then there’s the rent. Broadway Villa, operating in a far costlier market, paid $587,318 to lease its recently-renovated building, according to the Journal. Eureka Rehabilitation, on the other hand, paid $864,899  for its lease to a company controlled by Rechnitz.

And that doesn’t look to be an outlier. Using data provided by the National Union of Healthcare Workers, the Journal reported that Rechnitz’s five Humboldt nursing homes last year “paid twice as much per bed in rent ($8,481) as a comparable company in Marin County ($4,813).”

“On paper, Eureka charted a staggering $1 million dollar loss for the 2014-15 fiscal year. But according to these same records, all five companies sent around $4.6 million back to companies associated with their owner, who in 2015 said his income was around $3 billion a year.”

Did Rechnitz plow that money back into his nursing homes? Nope. More on that in an upcoming post.

Investigators Hit Another Brius Nursing Home with $20,000 Fine

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In recent months, California officials hit Brius with a second “Class A” citation and $20,000 fine for substandard care, according to government records. The fine, issued August 18, 2016 at Brius’ Seaview Rehabilitation and Wellness Center in the Eureka, California, came just two weeks after another Brius nursing home was fined $20,000 for violations that required the emergency evacuation of a patient by ambulance to a hospital ICU.

Class A citations are issued for violations that put residents in imminent danger of death and/or serious harm.

According to records of the California Department of Public Health (see below), state investigators fined Seaview Rehab and Wellness Center for substandard care that led a resident to develop a “Stage 4” pressure sore in less than three weeks after arriving at the nursing home.

The resident arrived at the 99-bed nursing home on November 18, 2015 following a hospital stay for heart surgery, according to investigators. The nursing home’s initial assessment of the resident noted he suffered from severe cognitive impairments and was nearly totally dependent on staff for all of his daily needs. These two things placed the resident at risk of developing pressure sores, which prompted the nursing home to establish a regimen of care that included checking the resident’s skin often and regularly for any abnormalities.

On December 2, 2015, two weeks into his stay at the nursing home, staff noticed an open area on the resident’s right buttock. According to the inspector’s report, the open wound had no dressing and was neither measured nor documented. The staff member who noticed the skin abnormality stated it looked “like a popped blister.”

Five days later, the resident was rushed to a hospital emergency room suffering from a life-threatening 102 degree fever, altered level of consciousness, and increased tremors. Hospital records revealed that the resident’s symptoms were due to complications from a “Stage 4” pressure sore. The pressure sore measured 2.5 inches in diameter, was complicated with dead tissue at the wound bed that had to be surgically removed. The sore had become infected with multiple bacteria which resulted in pain, sepsis, and a virulent staph infection (MRSA) that required hospitalization and prolonged antibiotic treatments.

Multiple academic studies indicate that lower staffing levels among nursing home caregivers are associated with higher rates of pressure sores, hospitalizations, urinary tract infections, and other problems.

Between June 2013 and June 2016, the California Department of Public Health (CDPH) issued 37 “Class A” citations at Brius nursing homes. The CDPH cited the volume and severity of these citations as evidence of the Brius’ systematic violation of the rules governing the state’s skilled nursing industry. In July 2016, the CDPH took an unprecedented step of denying Brius’ application to operate five nursing homes.

Brius is owned by Shlomo Rechnitz, a Los Angeles billionaire who runs the company through network of more than 130 corporations.

 

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State regulators slap Brius nursing home with $20k fine after resident suffers life threatening crisis

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On June 13, 2016, state regulators tagged Brius’ Granada Rehabilitation and Wellness Center with a $20,000 fine for committing a “Class A” violation that left a resident in imminent danger of death or serious harm. The facility, an 87-bed nursing home, is located in Eureka, California.

During their investigation of an April 28th complaint, California Department of Public Health (CDPH) inspectors found that the Humboldt County nursing home failed to contact a physician immediately after an elderly resident became rigid, began vomiting a brownish-yellow fluid, and had her eyes roll back into her head. The resident was rushed to a local hospital emergency room several hours after she was found unresponsive.

By the time the resident arrived at the emergency room, the resident had rapid and shallow breathing similar to that of a person experiencing cardiac arrest, severe dehydration, reduced brain function, and sepsis, according the CDPH report. ER doctors rushed her to the hospital’s Intensive Care Unit (ICU) where she was intubated and placed on mechanical ventilation.

She was readmitted to the nursing home following her discharge from the hospital. According to the inspection report, the resident was readmitted with a Stage 4 pressure sore to her tailbone, a urinary tract infection, kidney failure, poorly controlled diabetes, a heart attack following a cardiac arrest, and blood trapped between her chest wall and lungs that required draining.

This event is one of the 37 Class A citations CDPH issued against Rechnitz nursing homes between June 2013 and June 2016. The CDPH has cited the volume and severity of these citations as evidence of Rechnitz’ systematic violation of the rules governing the state’s skilled nursing industry. As a result, the CDPH recently took an unprecedented step of denying Rechnitz’ application to operate five nursing homes.

Brius’ former South Pasadena nursing home has new operators, recertified by feds

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Shlomo Rechnitz’ Brius corporation had operated the nursing home formerly called South Pasadena Convalescent Hospital for over eight years. Under its tenure, the nursing home was jointly investigated by the FBI, IRS, and California Department of Justice for alleged criminal activity; saw local police officers responds to over 1,100 calls for service; and received dozens of citations, and hundreds of thousands of dollars in fines from state and federal regulators. Finally, in January 2015, the federal government stripped the facility from participating in the Medicaid program for alleged poor quality care following the deaths of several patients, according to the Sacramento Bee. The most tragic of these deaths was that of former nursing home resident Courtney Cargill who doused herself in gasoline and lit herself on fire in a nearby alleyway. She died hours later at a local hospital as a result of second- and third-degree burns to over 90 percent of her body.

In August 2015 the facility was transferred to new operators, Elliot Zemel and Yudi Schmukler. Back then, the new operators told the Bee that the nursing home’s past problems were an “embarrassment for anyone who’s in the industry.”

Zemel and Schmukler have since invested nearly $1 million into nursing home. Gone is the tumult that seemed to typify the home under Rechnitz’ ownership, and just this year in September, the facility was recertified by the federal government.

South Pasadena Mayor Diane Mahmud, who cut the ribbon that ceremoniously reopened the facility, told the South Pasadena Review that the nursing home has gone “from being a problem to being a wonderful asset,” and adding “FBI agents no longer frequent the place, local police officers make far less visits, convicted felons are not among the patients and 9-1-1 calls have drastically fallen off.”