Category Archives: Brius LLC

Brius sued over resident death in Humboldt County

Brius LLC,

The family of an 84-year-old woman who died in a Brius nursing home is suing the company, claiming that it intentionally understaffed the facility to cut costs.

The Eureka Times-Standard reported last week that 84-year-old Ida Branch died five days after being admitted to the Pacific Rehabilitation and Wellness Center in Eureka following a surgical procedure on her leg.

Branch’s relatives arrived at the facility to find her “barely alive … with significant changes in her mental status and breathing,” according to the lawsuit. “By then, the facility had still not provided (her) the breathing tube requested by her family every day since admission.”

Branch died later that night, according to the lawsuit, which also lists Brius owner Shlomo Rechnitz and Brius’ management company, Rockport Healthcare Services, as defendants.

Brius closed Pacific Rehabilitation and Wellness Center earlier this year, amid reports that the facility suffered from significant structural problems that would have required expensive upgrades.

The lawsuit comes on the heels of several wrongful death claims against Brius in Humboldt, including one case in which Brius settled a claim that that one of its homes was accused of dumping a blind man suffering from dementia in a local hotel with nothing to eat except a half-gallon of milk, instant noodles and Velveeta cheese.

Branch is being represented by the law firm of Garcia, Artigliere & Medby, which filed a lawsuit earlier this year against another Brius home in Eureka. alleging that the Eureka Rehabilitation and Wellness Center failed to prevent falls by a patient who suffered severe injuries from her falls.

Download (PDF, 9.56MB)

Brius debated by top California governor candidates

Brius LLC, , , ,

On Oct. 22, 2017, the National Union of Healthcare Workers sponsored a forum with the leading candidates to become the next governor of California. During the forum in Anaheim, the candidates were asked about Brius and the challenge of disciplining nursing home companies with poor patient care records.

Lt. Gov. Gavin Newsom said as governor he would take a proactive posture in making sure troubled operators are disciplined and that the discipline sticks. “If there’s a bad actor, you’ve got to call that out,” he said. “It’s a question of enforcing the laws on the books and making sure the folks appointed to the positions of oversight are doing their jobs.”

All of the candidates expressed openness to new laws tightening control over nursing homes. Former Los Angeles Mayor Antonio Villaraigosa said, “I’ll work with the legislature to make sure we have laws with teeth … to make sure they don’t get away with murder.”

State Treasurer John Chiang said he would make sure the state “identifies those bad actors so they can’t create subsequent companies,” a tactic Brius CEO Shlomo Rechnitz has employed in building his nursing home empire. Chiang added that bad actors can’t be allowed to “evade their past misbehavior. They have to fix the problem before going forward.”

And former State Secretary of Public Instruction Delaine Eastin said: “We need to make sure that those agencies that do the oversight over your hospitals and your nursing homes have people on fire to do the right things for all of you but especially for all those patients who are   not getting the kind of care they deserve in California.”

 

 

Brius whistleblower said Rechnitz knew about kickback scheme

Brius LLC

The money-for-patients kickback scheme that resulted in a multi-million penalty against California’s largest nursing home operator may have been far more pervasive than prosecutors indicated when they announced a settlement last month, court records show.

In her original whistleblower complaint, obtained by BriusWatch, Viki Bell-Manako, alleged that Brius brass including CEO Shlomo Rechnitz were informed of the kickback scheme and that it extended to multiple hospitals in and around San Diego.

Bell-Manako, a former marketing director at a Brius home in San Diego, described Brius officials treating Medicare patients as a commodity to be purchased with bribes, because they generate far higher reimbursement rates than non-Medicare patients.

To secure Medicare patients, the whistleblower alleged that Brius:

  • Put hospital workers on the company payroll with some making $1,000 a month in return for referrals of Medicare patients.
  • Paid a manager at Kindred Hospital $4,000 per month to refer Medicare patients to Brius homes
  • Transferred Medi-Cal patients to other facilities to open beds for Medicare patients
  • Hosted parties for hospital case managers who referred Medicare patients to Brius homes.

Moreover, Bell-Manako said that Brius officials didn’t just bribe hospital workers for lucrative patients; they also pocketed cash kickbacks from a home health agency in exchange for referring patients exiting Brius homes.

Bell-Manako said in court papers that she personally informed Rechnitz of her concerns and that one of the key figures behind the scheme was Guy Reggev, a partner of Rechnitz’s in several of his nursing homes.

Reggev had his mother, Judy Reggev, “go to the floor of Scripps-Mercy (Hospital) with a cart full of snacks food and water to give to all the case managers,” according to the complaint. Two hospital workers, at one pointed, flew to New York to visit Ms. Reggev at her home.

Bell-Manako’s complaint triggered a federal investigation into Brius’ operations in San Diego that ended last month when Brius agreed to pay up to $6.9 million to resolve kickback and fraud allegations.

However, Brius did not admit guilt to many of the accusations made by the whistleblower in its settlement with federal prosecutors. The company only admitted to offering kickbacks at Scripps Mercy Hospital San Diego, and claimed that Brius officials were unaware of employees using corporate credit cards to buy hospital workers gift cards, massages, tickets to sporting events and a Hornblower cruise.

In her complaint, Bell-Manako said the kickback operation extended to seven San Diego hospitals, and that she made a personal visit to Rechnitz’s home to express her concern about it. She also said that the company rewarded marketing directors who participated in the kickback scheme with free cars, including Lexus and Mercedes SUVs.

Additionally, she claimed that Brius paid a doctor to refer Medicare patients to its nursing homes. According to the complaint, the doctor provided so many patients that two homes had to “transport Medi-Cal patients to alternate facilities to make room for the higher compensation Medicare referrals.”

Download (PDF, 8.75MB)

Brius administrator faces jail time in elder abuse prosecution

Brius LLC, ,

The embattled administrator of a Brius nursing home is standing trial this week in connection with criminal charges that he wrongfully discharged residents who were not capable of caring for themselves.

Brius owner Shlomo Rechnitz has so far refused to fire Rush Melliti, the administrator of the 160-bed Rehabilitation Center of Bakersfield, who faces up to 30 months in county jail if he is convicted of all three counts of elder abuse and two counts of wrongful discharge of a nursing home resident.

State prosecutors say that in one instance, Melliti erroneously told a female nursing home resident that she owed the home money. Then, prosecutors say, he sent her to an independent living apartment even though she was unable to work or go to the bathroom without assistance. According to prosecutors, the woman was unable to get out of the transport van, and was “sent to the hospital in an ambulance where she slept in the hallway for two nights.”

Prosecutors also say that Melliti, “without legal notice or justification, discharged one man, who ended up in the hospital, where his psychological issues required that he be physically restrained.”

In another instance, prosecutors say Melliti discharged a man without notice or instructions on how to take his medications. The man was unable to care for himself and had to be taken to a different nursing home to receive treatment for a wound on his non-amputated leg, according to court papers.

State records show that Melliti makes about $150,000 per year as the administrator of the Bakersfield home. Prosecutors are asking a judge to set a bail condition prohibiting him from working at facilities where he would oversee the care of elderly and disabled individuals.

This is not the first instance in which high-ranking Brius administrators have been criminally charged in connection with the care and treatment of residents. Two years ago, state prosecutors charged the director of nursing and the nurse supervisor of Verdugo Valley Skilled Nursing and Wellness Centre for failing to provide immediate care to a resident who later died at a nearby hospital.

In 2011, state prosecutors indicted Verdugo Valley’s administrator on charges of felony abuse and neglect in connection with the death of a different patient.

Download (PDF, 3.4MB)

Shlomo Rechnitz

Brius CEO testifies in class-action case

Brius LLC

Brius Healthcare CEO Shlomo Rechnitz acknowledged publicly for the first time that he set up middleman leasing companies that boost his profits by charging inflated rents to his nursing homes.

Rechnitz, the largest nursing home operator in California, acknowledged the practice, which is at the center of an ongoing state audit, during an August 28, 2017 deposition in connection with a class action lawsuit targeting him.

During the nearly two-hour deposition, Rechnitz acknowledged that he and his wife set up a middleman landlord firm in Eureka, Calif. that made a “profit” by leasing skilled nursing facilities from their property owner and then subleasing them to his nursing homes at a higher price.

Rechnitz’s use of middlemen landlords was first uncovered in the report “Brius Healthcare’s Insider Transactions,” released in August by the National Union of Healthcare Workers. The report found that Rechnitz used this scheme at many homes, and that Brius homes in 2015 paid on average 36 percent higher rent than similar homes in the same county. The findings contributed to a vote by lawmakers earlier this year ordering the California State Auditor to review Brius’ business dealings with other companies controlled by Rechnitz.

Attorneys questioned Rechnitz in August about his rental arrangements and other business dealings in connection with the case “Foreman vs. Rechnitz.” The lawsuit, covering current and former residents at 55 Brius homes, alleges that the company deceived them about its patient-care track-record when they sought care at the Brius facilities.

In response to a question from the plaintiff’s attorney Stephen Garcia, Rechnitz, a self-proclaimed billionaire, said he had difficulty remembering details about his nursing home operations and organizational structure because his holdings are so vast.

“Again, Mr. Garcia, as I’m sure you know, I own ninety nursing homes; probably a good few hundred million dollars in real estate; an ambulance company; a durable medical company; a pharmacy; and oxygen company; a wound care company; a company that makes canisters for gas, and I’m probably forgetting a lot of them, so I really just do see everything from 40,000 feet…” (p. 15)

Of course, Rechnitz failed to mention his $8 million Gulfstream G-IV jet, which literally travels at 40,000 feet.

During the deposition, Garcia asked Rechnitz to review numerous documents, including Medi-Cal cost reports, leases, and subleases, which were posted on BriusWatch at the time of the release of NUHW’s report.

In acknowledging that he sets up middleman landlord companies to create profits for himself (p. 58), Rechnitz also affirmed that he signed certain lease documents, which imposed inflated rents on his nursing homes, on behalf of both parties to the deal.

Rechnitz also acknowledged that the administrator of one of his nursing homes informed him in 2015 that the facility was falsifying its reporting to state officials about the amount of nursing care provided to residents (p. 76). The full transcript of Rechnitz’ deposition is below.

Download (PDF, 1.61MB)

Brius Agrees to Pay $6.9 Million to Feds over Fraud, Illegal Kickbacks

Brius LLC

Following an FBI corruption probe, Brius Management Co. agreed this week to pay up to $6.9 million to resolve allegations that it defrauded government healthcare programs when its employees paid illegal kickbacks to a San Diego hospital in exchange for referring patients to four of its nursing homes.

The settlement, announced Thursday by Acting United States Attorney Sandra R. Brown, stems from a “whistleblower” lawsuit alleging that four Brius nursing homes submitted fraudulent bills to the Medicare and Medicaid programs for services provided to patients referred to the facilities through the illegal kickbacks. A copy of a press release issued by the US Attorney’s Office is below.

Brius admitted that its employees at the four San Diego nursing homes used corporate credit cards to pay for gift cards, massages, tickets to sporting events, and a Hornblower cruise given to discharge planners at Scripps Mercy Hospital San Diego in order to induce patient referrals, according to federal law enforcement agencies.

“Kickbacks for patient referrals are illegal under federal law because of the corrupting influence on our nation’s healthcare system,” Brown said. “This settlement demonstrates our resolve to combat fraud that compromises the care provided to patients served by a government healthcare plan.”

As part of the settlement, the four Brius nursing homes have entered into “Corporate Integrity Agreements,” an enforcement tool used by the federal government.

It’s unclear whether the kickback scheme was carried out at only the four San Diego facilities, or whether it’s a broader practice at Brius facilities.

Brius is the largest skilled nursing provider in California accounting for about 1-in-14 nursing home beds. The settlement is the largest known disciplinary action taken against Brius, whose owner Shlomo Rechnitz was labeled “a serial violator” in court papers filed in 2014 by former California State Attorney General Kamala Harris.

The company is not stranger to state and federal investigations, including two FBI raids in recent years.

The four San Diego area nursing homes covered by the settlement are: Amaya Springs Health Care Center in Spring Valley, Brighton Place – San Diego, Brighton Place – Spring Valley, and Point Loma Convalescent Hospital.

Download (PDF, 207KB)

 

Brius Healthcare Insider Transactions — The Video

Brius LLC

In August of 2017, the National Union of Healthcare Workers  published “Brius Healthcare’s Insider Transactions,” a report  describing how Brius CEO Shlomo Rechnitz profits by steering millions of dollars in taxpayer funds to a web of companies he created to service his nursing homes.

Now the union is releasing a video showing how California’s largest nursing home operator has reaped millions by setting up companies that charge his homes for financial advice, supplies and property leases, which are over 30 recent above market rents.

Since the original report was released, the California State Auditor has begun auditing Brius’ business dealings with other firms controlled by Rechnitz. The audit was ordered by state legislators earlier this year.

Family sues Brius over recent nursing home death

Brius LLC

Brius is facing more allegations of understaffing and substandard care in a California courtroom.

On November 7, 2017, a resident’s family sued Brius for elder abuse in Los Angeles Superior Court following the resident’s death last month at Imperial Heights Healthcare & Wellness Center in Brawley, California. See below for a PDF copy of the lawsuit.

The case centers on Guillermo Espinosa, an 83-year-old man admitted to the nursing home in December 2016 for rehabilitation following a hospital stay.

As a result of “chronic understaffing” and substandard care at the Brius facility, the suit alleges, Mr. Espinosa suffered multiple falls, preventable pressure sores on his feet and coccyx area that penetrated to the bone, “a blood infection that required amputation of both legs, as well as other injuries… which were the proximate causes of his death on or about October 17, 2017” (pp. 5-6).

Last month, after developing “a gruesome foot ulcer” and a blood infection, both of Mr. Espinosa legs were amputated at a nearby hospital, according to the suit. Mr. Espinosa died days later.

According to the suit, “These injuries were entirely preventable had there been sufficient staff on duty, in both number and competency, to actually implement the protections required by the facility’s own Plan of Care and physician orders and assessments for Guillermo Espinosa” (p. 10).

The lawsuit alleges that Brius “wrongfully withheld required care” from Mr. Espinosa.

“In short, staff at the facility did not have time to turn and reposition Guillermo Espinosa every two hours to relieve pressure on [his] bony prominences, to make sure he received pressure-relieving devices, to make sure Guillermo Espinosa was clean and dry at all times, and to make sure Guillermo Espinosa was properly hydrated with sufficient nutrition to fight off the development of pressure sores” (p. 11).

The lawsuit also alleges that Brius CEO Shlomo Rechnitz and other top executives “siphoned off huge and unwarranted amounts of money” from the nursing home through “related party transactions” with Boardwalk West Financial Services, SR Capital, LLC, and other companies (p. 4).

Earlier this year, NUHW published an analysis of Brius’ related-party transactions (“Brius Healthcare’s Insider Transactions: How California’s Largest Nursing Home Chain Funnels Millions to Insider Companies”), citing state data that details how Brius nursing homes paid $67 million in 2015 to 65 companies controlled by Rechnitz and his relatives for financial services, medical supplies, loan repayments, facility rentals and other items. These transactions are also the subject of an ongoing investigation by the California State Auditor, which was ordered in June 2017 by California’s Joint Legislative Audit Committee.

The lawsuit – known as Guillermo Espinosa vs. Boardwalk West Financial Services, LLC et al – was filed by the firm Garcia, Artigliere & Medby of Long Beach.

Download (PDF, 11.13MB)

Class-Action Litigation Moves Forward against 55 Brius Nursing Homes

Brius LLC
Attorney Stephen Garcia photographed in Oakland

In yet another legal setback for Brius Healthcare, nursing home residents have been allowed to move forward with a class-action lawsuit against dozens of the company’s nursing homes across California.

The class-action case — known as Foremen vs. Shlomo Rechnitz et al — is being heard by a Los Angeles arbitrator, who recently ordered letters to be sent to thousands of current and former residents of 55 Brius nursing homes.

The letter (see below) informs current and former residents of their right to communicate with the attorneys suing Brius over allegedly substandard care as well as the company’s alleged misrepresentations to consumers. According to the letter, the litigation covers a large “class” of residents:  individuals who were residents of any one of the 55 Brius nursing homes at any time since October 7, 2014.

Download (PDF, 243KB)

The case alleges that during residents’ admissions process, Brius and Rechnitz concealed the fact that Brius “has a long history of being serial violators of skilled nursing industry laws” (p. 28).

It also alleges that Rechnitz “actively and intentionally concealed from [residents]… the material facts relating to the chronic understaffing” and that “this concealment… was intended to deceive… [residents] into believing that [Brius] facilities were properly staffed to induce… class members into becoming residents of [Brius] facilities” (p. 60).

The case, originally filed in Los Angeles Superior Court, is moving forward in the litigation process. Recently, residents’ attorneys from the firm of Garcia, Artigliere & Medby deposed Brius CEO Shlomo Rechnitz.

A copy of the lawsuit is available below.

Download (PDF, 7.56MB)

 

Complaint: “Did Brius CEO falsify licensure applications for nursing homes?”

Brius LLC

Did Brius Healthcare CEO Shlomo Rechnitz falsely describe his company’s patient-care track record in nearly two dozen applications to the California agency responsible for licensing nursing homes? Did he perjure himself in the process?

These are some of the questions posed in an October 25 complaint submitted by the National Union of Healthcare Workers (NUHW) to the California Department of Public Health.

NUHW’s complaint presents copies of 22 applications submitted by Rechnitz since 2014 in which it appears he falsely stated that none of his facilities has ever faced “adverse actions” by government regulators such as having been suspended or decertified by the Medi-Cal Program. Here’s an excerpt from one of Rechnitz’ 22 applications, in which he checked “no” and then signed a statement under penalty of perjury.

At least three of Rechnitz’ nursing homes have been suspended and/or decertified from the Medi-Cal Program due to severe patient-care and other violations, according to details cited in the complaint. NUHW’s complaint includes 157 pages of licensure and other records to support its request for an investigation.

Interestingly, 21 of Rechnitz’ 22 applications containing the allegedly false statements are still under review by the agency. Rechnitz is operating these 21 nursing homes under provisional licenses while the agency reviews his applications for permanent licenses.

So why hasn’t the California Department of Public Health taken action against Rechnitz?

Good question.

It sure sounds like the California Department of Public Health should be taking these matters seriously. For example, the text at the bottom of the above excerpt from Rechnitz’ application reads, in part:

“The information provided on this form is mandatory and is necessary for licensure approval. It will be used to determine individual applicant’s or applicant facility’s ability to provide health services… Failure to provide the information as requested may result in nonissuance of a license or license revocation.”

In addition, Rechnitz signed and dated a statement under penalty of perjury that reads: “I declare under penalty of perjury that the statements on this form and any accompanying attachments are correct to the best of my knowledge.”

In its letter, NUHW asks the California Department of Public Health to investigate Rechnitz’ allegedly inaccurate licensure applications and “and, if confirmed, apply all appropriate sanctions and/or penalties, including license revocation.”

Download (PDF, 572KB)

Download (PDF, 8.39MB)