Here’s the latest about some of the substandard care found in nursing homes controlled by ultra-Orthodox multi-millionaire Shlomo Yehuda Rechnitz. From Briuswatch.org: One of Brius Healthcare’s largest nursing homes is “woefully understaffed,” forcing residents to go weeks without a shower and sit in their own excrement for hours waiting for assistance, according to a recently […]
Brius hit with over a dozen class action lawsuits
Brius has been hit with 15 class action lawsuits accusing the nursing home conglomerate of systemically understaffing its nursing homes to maximize profits, while delivering substandard care to thousands of elderly residents.
“These lawsuits are an effort on behalf of these vulnerable citizens to ensure that their needs are met,” Attorney Stephen Garcia told the Eureka Times-Standard. Garcia’s law firm and The Arns Law Firm in San Francisco allege that Brius homes across California misled potential residents about their compliance with staffing requirements.
In a statement to the Marin Independent Journal, Jill Basinger, a spokeswoman for Brius owner Shlomo Rechnitz, claimed that Brius homes “not only maintain” minimum staffing requirements, “they even exceed them.”
However, Brius has been cited multiple times in recent years for understaffing, including at the Novato Healthcare Center and San Rafael Healthcare and Wellness Center, which were included in the class action lawsuits. In March, Brius caregivers from both homes, represented by the National Union of Healthcare Workers, joined residents and their loved ones at a public forum to call on Brius to put an end to chronic understaffing.
Earlier this year, a state investigation found the 181-bed Novato facility “woefully understaffed,” forcing residents to go weeks without a shower and sit in their own excrement for hours waiting for assistance.
Last year, the California Department of Public Health fined Brius’ San Rafael facility $15,000 for violating the state’s minimum staffing laws.
There has been heightened attention to nursing home staffing after recent reports found that major skilled nursing facilities were not providing accurate data to state and federal regulators.
In June, Medicare lowered its star ratings for staffing levels in one in 11 of the nation’s nursing homes because they either had inadequate numbers of registered nurses or failed to provide payroll data that proved they had the required nursing coverage, Kaiser Health News reported.
The lawsuits allege that understaffing at Brius, which is California’s largest nursing home operator, resulted in tragic outcomes for residents.
One lawsuit filed in Alameda County Superior Court alleges that understaffing at Brius’ Alameda Healthcare & Wellness Center contributed to the 2017 death of Cathy Campbell, a 61-year-old Stockton woman.
According to the lawsuit, Campbell, who suffered from hypertension and chronic kidney failure, developed a severe bedsore and urinary tract infection that worsened because the facility lacked sufficient staff to care for her. Her health continued to suffer after she was transferred to a second Brius home in Oakland.
Garcia, who wrote that Campbell’s needs were “flat-out ignored,” blamed the Alameda facility for failing to properly treat her in a statement to the East Bay Times. It “knew that by not elevating her to a higher level of care when the sore reached a Stage III, they were violating the law, but in the interest of profits over patients, they made a conscious choice to wrongfully deny needed medical care.”
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State to audit nursing home company’s use of public funds
A state committee voted Wednesday to approve an audit of California’s largest nursing home owner, Brius Healthcare Services, and whether the company misused hundreds of millions of dollars in government health care funds to benefit its affiliated businesses.
North Coast Assemblyman Jim Wood (D-Healdsburg) is a member of the Joint Legislative Audit Committee that voted in favor of the audit Wednesday afternoon. He said the Los Angeles-based Brius Healthcare Services has a “very convoluted” system of nursing homes under limited partnerships and has connections with other businesses founded by Brius Healthcare’s CEO Shlomo Rechnitz.
“Brius controls one in 14 [nursing home] beds in California and it is a very convoluted network of limited partnerships and all sorts of other mechanisms out there,” Wood said to the Times-Standard. “Part of this audit is to see if they are all legitimate. … Our feeling is the way they’re doing this is to maximize profits. It’s not about providing high quality care for people.”
Brius’ spokesman Stefan Friedman wrote in a statement to the Times-Standard that Brius representatives were present at the committee hearing today and were in full support of the proposed audit.
“Not only will the audit results prove that Brius has abided by all applicable rules and regulations, it will also show that Brius went well above and beyond its duties and obligations to subsidize the care of California’s most vulnerable,” Friedman said.
Friedman also questioned McGuire’s and Wood’s information, which it states was provided by the National Union of Healthcare Workers. The union has been outspoken in its opposition to Brius Healthcare Services and created a website — briuswatch.org — to scrutinize the company and its CEO Shlomo Rechnitz.
“What is most disturbing though is that legislators McGuire and Wood would also glean their information from ‘newspapers’ and blogs, demonstrating their lack of understanding for the very program they oversee,” Friedman continued. “We urge the community and the media to follow the audit through to its findings.”
Brius Healthcare, which owns five of the six nursing homes in Humboldt County and over 80 nursing homes statewide, received over $500 million in reimbursement funds in 2015 from the MediCal and Medicare government health plan programs, which made up 80 percent of its profits, Wood said.
Wood and his North Coast legislative colleague Sen. Mike McGuire (D-Healdsburg) said Brius paid out more than $67 million that year to businesses with similar or related ownership for the purchase of services, goods and supplies, and paid more than $46 million to companies established Rechnitz that serve as landlords for their nursing home facilities.
A letter from McGuire and Wood to the state audit committee from earlier this month states that there is evidence that Brius facilities paid inflated prices to some of these business, with some prices exceeding 200 percent of market averages.
The nursing home company has come under fire for alleged patient health care violations, which has led to state entities denying the company’s bids to acquire more nursing homes and has led to multiple wrongful death lawsuits to be filed in Humboldt County in recent months.
“This is absolutely unacceptable especially when the state and federal government is spending $500 million dollars to care for our state’s most vulnerable in Brius facilities,” McGuire said to the Times-Standard on Wednesday. “We need to hold this corporation accountable.”
Brius Healthcare has expressed dissatisfaction with the reimbursement rates it receives from the state for treating MediCal patients.
The company temporarily stopped accepting MediCal patients into its Humboldt County nursing homes in 2015 while it disputed reimbursement rates with the North Coast’s MediCal provider, Partnership HealthPlan of California. Partnership HeathPlan agreed to increase reimbursement rates to Brius and other long-term skilled nursing facilities.
In the latter half of 2016, Brius Healthcare used its plans to close of three Humboldt County nursing homes to pressure Partnership into providing higher reimbursement rates so as to prevent the closures. Brius Healthcare cited low staffing levels as their reasoning for the proposed closure.
“We are confident we can avoid these closures, but we need PHP to start paying its fair share and allow us to attract full-time staff to meet our patients’ needs,” Friedman told the Times-Standard in September.
Partnership declined to increase rates, prompting Brius to announce its intention to cancel its contract with Partnership. However, this announcement was shortly retracted after it became clear that the company would lose reimbursement funds. Brius announced in November that it would only be closing one nursing home — Pacific Rehabilitation and Wellness Center in Eureka — instead of three.
McGuire and Wood said the audit will likely be completed in 2018 and will be made public when it is given to the Legislature. McGuire and Wood said that the findings could result in legislation or, in the worst case scenario, criminal charges filed by the Attorney General’s Office.
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Judge Denies Skilled Nursing Defendants’ Change of Venue Bid
Judge Timothy Cissna denied skilled nursing magnate Shlomo Rechnitz’s request for a change of venue in a wrongful death and elder abuse lawsuit following a short hearing today, rejecting claims that he couldn’t get a fair trial in Humboldt County.
Cissna said the case should be tried locally because it involves a substantial personal injury that occurred in Humboldt County and a recently named defendant lives in the area.
The judge also dismissed arguments made in the change of venue motion that contended “negative news articles” would taint the local jury pool, saying there hadn’t been a showing of “undue prejudice.”
The civil case before the judge — one of three currently pending against Rechnitz and the skilled nursing facilities he owns in Humboldt County — alleges low staffing levels at Seaview Rehabilitation and Wellness Center contributed to the death of Ralph Sorensen. The 76 year old died in January of 2016 from complications related to an infected pressure ulcer.
Seaview, Rechnitz, Brius and administrative services company Rockport are named in the lawsuit. (Read more about the case here.)
Rechnitz’s attorney James Yee, who appeared by phone, unsuccessfully argued that case law requires the venue be moved to Los Angeles County because that’s where most of the defendants live.
In court filings, the difficulty of traveling to Humboldt County and finding appropriate accommodations for Shlomo Rechnitz’s wife Tamar Rechnitz, who holds a share in the company, were also cited as reasons for the change of venue request.
Those issues were not brought up during the court hearing.
Yee also told the judge that the most recently named defendant was added to the lawsuit as a “doe” in “bad faith” because her name should have been readily attainable and asked Cissna to disregard her Humboldt County residency as a factor in his decision.
Attorney Timothy Needham, who represents Sorensen’s family, told Cissna that Yee was citing an archaic case law in his claims about the naming of the latest defendant, who is the administrator of Seaview.
“The arguments they’re making are over 100 years old and they are just wrong,” Needham said.
Cissna told the attorneys he was following through with his tentative ruling and denied the change of venue motion. The next hearing in the case is set for Sept. 5
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In February of 2017, the National Union of Healthcare Workers (NUHW) published a report (“Misplaced Priorities at 40,000 Feet”) about a luxury jet operated by a Brius-related company for the benefit of Brius’ owner and CEO, Shlomo Rechnitz.
The following are links to many of the source documents used to prepare the report. All of the documents are public records obtained from state and federal government agencies including the Federal Aviation Administration, the California Secretary of State, and the California Office of Statewide Health Planning and Development.
(1) “Aircraft Bill of Sale” (AC Form 8050-2) memorializing the purchase of the Gulfstream G-IV jet by SR Administrative Services, LLC. Dated September 20, 2013. Source: Federal Aviation Administration.
(2) “Aircraft Registration Application” (AC Form 8050-1) submitted by SR Administrative Services, LLC and signed by Shlomo Rechnitz. Dated September 20, 2013. Source: Federal Aviation Administration.
(3) “Aircraft Registration Renewal Application” (AC Form 8050-1B) submitted by SR Administrative Services, LLC. Dated July 12, 2016. Source: Federal Aviation Administration.
(4) Flight Data covering the period from September 2013 through July 2016, which the FAA provided in electronic “.xls” format. The hyperlinked spreadsheet contains two tabs: (1) “Sheet 1 – modified” and (2) “Sheet 2 – original”. Source: Federal Aviation Administration.
(5) “Loan and Security Agreement by and between Compass Bank and SR Administrative Services, LLC” signed by Shlomo Rechnitz and detailing a $3.628 million loan for the purchase of the jet. This document also describes the agreement by which SR Administrative Services, LLC leased the jet to SR Capital, LLC. See page 6 and various pages following the initial signature page, including an attachment entitled “Acknowledgment, Grant of Security Interest and Subordination Agreement by SR Capital, LLC.” Dated September 17, 2013. Source: Federal Aviation Administration.
(6) “Limited Liability Company Articles of Organization” (Form LLC-1) for “SR Administrative Services, LLC.” Dated June 3, 2013. Source: California Secretary of State.
(7) “Limited Liability Company Articles of Organization”(Form LLC-1) for “SR Capital, LLC.” Dated December 28, 2009. Source: California Secretary of State.
(8) “Statements of Information” (Form LLC-12) for “SR Administrative Services, LLC.” Dated November 9, 2015 and July 12, 2013. Source: California Secretary of State.
(9) “Statements of Information” (Form LLC-12) for “SR Capital, LLC.” Dated January 28, 2015 and October 6, 2015. Source: California Secretary of State.
(10) “Certificate of Status” for “SR Administrative Services, LLC.” Dated September 14, 2016. Source: California Secretary of State.
(11) “Certificate of Status” for “SR Capital, LLC.” Dated September 14, 2016. Source: California Secretary of State.
(12) “Certificate of Merger” (Form OBE Merger-1) for“SR Capital, LLC,” signed by Shlomo Rechnitz. Dated December 20, 2012. Source: California Secretary of State.
(13) Excerpt from Medi-Cal Cost Report Describing a Brius Nursing Home’s Transactions with SR Capital, LLC. This two-page excerpt is taken from a recent Medi-Cal Cost Report submitted by one of Brius’ nursing homes, Monterey Healthcare & Wellness Center (Rosemead, CA), to the California Office of Statewide Health Planning and Development (OSHPD). This excerpt offers an example of the kinds of financial transactions between “SR Capital, LLC” (the corporation that operates the jet) and individual Brius nursing homes. On the second page of the document, Monterey Healthcare & Wellness Center reports it paid $530,382 to SR Capital/YTR Capital during the 12-month period ended December 31, 2015. In addition, it shows that Monterey Healthcare & Wellness Center owed $4,327,952 to “SR Capital, LLC” at the end of 2015. Source: California Office of Statewide Health Planning and Development.
(14) Shlomo Rechnitz, SR Capital, LLC and SR Administrative Services, LLC. This notarized document is excerpted from the 54-page “Loan and Security Agreement by and between Compass Bank and SR Administrative Services, LLC,” which is available in its entirety on this page. It is excerpted here in order to document Rechnitz’ role atop SR Capital, LLC and SR Administrative Services, LLC, the corporations that operate and own the jet. For example, Rechnitz signed this notarized document which identifies him as the “CEO” and “Managing Member” of “SR capital, LLC, a California limited liability company, as the sole member and manager of SR ADMINISTRATIVE SERVICES, LLC, a California limited liability company…” Multiple additional public records confirm Rechnitz’ positions.
Humboldt County Brius home hit another wrongful death lawsuit
A Brius-owned nursing home in Humboldt County evicted a 63-year-old patient suffering from dementia and left him alone in a hotel room where he died four days later, according to a lawsuit filed last month by an attorney for the man’s sister.
Alan Dewey had been living for nearly two years at the Eureka Rehabilitation & Wellness Center, which state regulators fined $160,000 earlier this year for substandard care that stemmed from chronic understaffing. The nursing home also has been named in two other wrongful death lawsuits since November.
Dewey was admitted to the home in late 2014, according to his complaint filed by Amelia F. Burroughs of the law firm Janssen Malloy LLP. He had suffered a “significant brain injury in 1975 and a stroke, which affected his vision.” He also had “a seizure disorder and multiple complex medical problems.”
On Oct. 14, 2016, the nursing home “deposited” Dewey at the Clarion Hotel in Eureka with his medications, “a half-gallon of milk, instant noodles, and Velveeta macaroni and cheese,” according to the complaint, which described his hotel stay this way:
“Dewey could not see well enough to attend breakfast in the lobby of the hotel; could not see well enough to sort and take his medications appropriately, and could not see well enough to sort and take his medications appropriately, and could not see well enough to use the key card to enter his room or navigate his surroundings.”
He was found dead inside his hotel room on Oct. 18.
At the time that Dewey was allegedly dumped at the hotel, Rechnitz had announced his intention to close the Eureka nursing home and two others in Humboldt County in a move local officials said was a naked ploy to pressure them into once again boosting his reimbursement rates.
Dewey’s sister, Sherri McKenna, told Courthouse News she thinks her brother was discharged as part of Rechnitz’s effort to clear the nursing home given “the onerous requirements for resident transfers.”
The lawsuit names Brius CEO Shlomo Rechnitz, and several of his corporate entities as defendants for wrongful death and dependent adult abuse. “The facts are horrific,” Burroughs told the news outlet. “The corporate entities running the facility made decisions that I believe really hurt (Dewey).”
Burroughs’ firm is also representing the families of Ralph Sorensen and Randy Kruger. They both died after developing Stage IV pressure ulcers that became infected, according to lawsuits that also name Rechnitz among the defendants.
“Included in the lease agreement, which was forwarded to the Journal by NUHW staff, is a condition that Rechnitz reinvest $3 million back into infrastructure repairs on the facilities. A check of permits pulled for all five facilities reveals this work has not been done. The company may plead poverty: 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.”
A billionaire’s high-stakes gamble with patient lives
Are the most vulnerable patients in Humboldt County — the disabled and the elderly — better off here than they would be in skilled nursing facilities hundreds of miles away in Redding or Santa Rosa? For the concerned family members and patient advocates who spent the last four months fighting to keep Brius Healthcare from closing three of its five Humboldt facilities, the answer is yes. But news that the company would only close one facility — Pacific Rehabilitation and Wellness Center — might be a bittersweet victory. There is nothing to prevent Brius, which has a virtual monopoly on skilled nursing in Humboldt County, from threatening to once again withhold care. The service these facilities provide — rehabilitation and daily medical assistance — is vital. It is also, according to state and federal audits, substandard, poorly tracked and almost impossible to fix with the system currently in place.
Many of us will not know what a skilled nursing facility is until we have the misfortune of having to use one. This is the case with Jolon Wilson, who was severely injured in a car crash last January and spent several weeks in a Santa Rosa hospital before transferring to a top-rated care home, Broadway Villa, in Sonoma. It was challenging to be away from her family and support network, Wilson said, but she concentrated on getting better. She returned home in March. Shortly thereafter, her mother, Joan Poe, broke an ankle and needed rehabilitation of her own. Wilson assumed that Eureka Rehabilitation and Wellness Center would be similar to the facility in Sonoma. It was not.