Maryland Nursing Home Lawyer Blog

Suffering from dementia and confined to a wheelchair, 94 year-old Florida nursing home resident Elvira Nunziata needed near-constant supervision. Still, she managed to pass through a door that should have been locked, falling down a stairwell and sustaining fatal injuries in 2004. Her son, Richard Nunziata, knew someone at the nursing home had made a fatal mistake.

Nunziata filed suit against the nursing home for wrongful death, claiming that negligent supervision by staff led directly to his mother’s death. We reported last month in this Maryland Nursing Home Lawyer Blog that a jury awarded him $200 million in damages. There was one major problem with the verdict, however: no one showed up to defend the suit at trial. This case demonstrates how the law holding nursing homes liable for injuries has not caught up with the way nursing homes are owned and managed.

For-profit nursing homes, which have surged in the past decade or so according to the Tampa Bay Times, often split ownership of a nursing home among several different business entities. Each company would own different parts of the nursing home operation or handle responsibility, and liability, for different parts of the business. One company might own the building housing the nursing home, while another company owns the equipment and yet another handles payroll and personnel. If one part of a nursing home operation runs into legal trouble, a parent company can dissolve that business entity and create a new one. This process has little to no transparency. In this environment, it can be exceedingly difficult for someone seeking to make a claim for an injury to even identify which business is liable. It is even difficult for state and federal regulators to determine where to put liability for regulatory infractions.

In Nunziata’s case, Pinellas Park Care and Rehab Center, the home where his mother last lived, was owned by one company and operated by another. Trans Health Management, Inc., the home’s operator, reportedly had its corporate status revoked by the state of Florida by the time Nunziata sued in 2005. A forensic accountant testified at trial that Trans Health’s business was sold in 2006. Three separate companies each bought or “inherited” Trans Health’s operations, management contracts, and liabilities. The company that ended up with its liabilities, Fundamental Long Term Care Inc., also lost its corporate status and no longer exists. The accountant testified that most of these companies existed for the sole purpose of shuffling Trans Health’s assets and liabilities around. Nunziata’s best bet, for which there may be some precedent, is to go after the private equity companies that put all these businesses together in the first place.

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A Rhode Island nursing home faced an ultimatum from the government in January: fix various problems by February 1 or lose its status as a Medicare and Medicaid provider. The Centers for Medicare & Medicaid Services (CMS), the federal agency tasked with managing both programs, sent a letter to Hebert Nursing Home in Smithfield, Rhode Island on January 19 outlining infractions of seven regulations that the nursing home needed to address. The regulations in questions dealt with issues of mistreatment or neglect of residents, residents’ dignity and respect, residents’ well-being, administration of the facility, and the medical director’s responsibilities. A CMS spokesperson called the alleged infractions “serious” and said they posed “immediate jeopardy” for residents, but could not disclose many specific details of the allegations.

CMS has legal authority to monitor nursing homes that are part of the Medicare and Medicaid systems, and it has the responsibility of maintaining standards of quality in all of the nursing homes it monitors. As part of its corrective actions, CMS began fining Hebert $5,500 a day beginning December 22, 2011. It also stated that it would begin denying payments under both its programs for new patients after January 23. It gave Hebert’s administrators until February 1 to address CMS’s concerns, after which it would terminate Hebert’s involvement with Medicare and Medicaid. This would effectively destroy Hebert’s business since so many nursing home residents rely on one or both of these programs to pay for their care.

By the beginning of February, CMS had withdrawn its complaint after receiving a satisfactory response from Hebert, indicating that it was addressing CMS’s concerns. At about the same time, however, allegations publicly surfaced that several staff members had voiced concerns about the sexual abuse of a resident. Two certified nursing assistants and a psychiatric nurse reportedly gave statements to police on November 30 and December 1, 2011, describing incidents of sexual abuse they had witnessed at the nursing home.

The three employees stated that they saw two women sexually abusing their 89 year-old mother, a resident at the facility, on several occasions while visiting her. In their statements to police, they reported seeing the women touching their mother in her genital area and other acts of abuse. The two women reportedly told the workers that they needed to check their mother’s incontinence, but the psychiatric nurse claims that there would be no reason for them to do so manually.

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A former staffer at a Timonium, Maryland nursing home pleaded guilty late last month to abuse of a vulnerable adult in the second degree. This Maryland Nursing Home Lawyer Blog previously reported on the case of Shirleen Diane Sheppard when prosecutors first indicted her last year. Sheppard worked as a geriatric nursing assistant at Stella Maris. According to the Maryland Attorney General’s Office, Sheppard was attending an 82 year-old female resident on October 17, 2010. She became angry and slapped the patient’s face. She also reportedly refused to put ointment on the patient’s rash and kept the assistance call button away from the patient.

Another staffer witnessed the incident, cared for the patient, and then reported the matter to the nursing home’s administration. Sheppard admitted to the assault, and the nursing home fired her. The patient reportedly did not suffer any lasting injury.

Sheppard was indicted in the Circuit Court of Baltimore County on four counts: one count of second-degree abuse of a vulnerable adult, two counts of second-degree neglect of a vulnerable adult, and one count of second-degree assault. All of these charges are misdemeanors under Maryland law. Second-degree assault carries a potential penalty of ten years imprisonment and a fine of up to $2,500. The abuse and neglect of a vulnerable adult charges each carry potential prison terms of five years and fines of $5,000. Maryland’s criminal laws define “abuse or neglect of a vulnerable adult” as the deliberate infliction of pain or injury, “cruel or inhumane treatment,” sexual abuse, and failure to provide “necessary assistance and resources” like food and shelter. The second-degree abuse or neglect statute applies to a caregiver, parent, household or family member, or other person with “permanent or temporary care or responsibility for the supervision” of an adult deemed “vulnerable.” “Vulnerable” is defined as “lack[ing] the physical or mental capacity to provide for [one’s own] daily needs.”

Sheppard formally entered a guilty plea to one count of second-degree abuse of a vulnerable adult at a hearing on January 18, 2012. The judge accepted her plea and imposed a three-year suspended prison sentence. She will be on probation for three years and must complete 150 hours of community service within the next year. The judge also barred her from working as a geriatric nursing assistant during her probation term.

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A Maryland podiatrist, Larry Bernhard, was sentenced by a U.S. District Judge in Baltimore to fifty-four months in prison, plus three years’ supervised release, for a series of fraudulent bills to Medicare totaling more than $1.1 million. He pleaded guilty to charges that included health care fraud and identity theft. His scheme involved misrepresentation of podiatric services in billing statements to Medicare, and theft of nursing home patients’ names and identities in order to bill for services never actually rendered.

Bernhard operated a podiatry practice, Chesapeake Wound Care Center, out of his home in Gambrills, Maryland. He has been licensed as a podiatrist by the state of Maryland since 1981. He first came to the attention of law enforcement over allegations that, between April 2002 and October 2004, he submitted a series of fraudulent claims to Medicare. In about eighty separate claims, he claimed reimbursement for podiatric services rendered at “skilled nursing facilities” that were actually performed at hospitals. He did this allegedly in order to claim a higher rate. He and the government entered into a settlement agreement in October 2007 regarding these allegations. As part of that agreement, Bernhard agreed to a three-year period of exclusion from all federal health care programs, including Medicare and Medicaid.

According to Bernhard’s recent plea agreement, he began a new fraudulent billing scheme soon after signing the settlement agreement. Beginning in October 2007, and continuing until July 2010, he submitted fraudulent bills to Medicare Advantage plans and received upwards of $1.1 million. Prosecutors estimated that at least $1 million of the total amount was compensation for podiatry services that he never actually performed. In order to enact this scheme, Bernhard admitted, he used the personal identifying information of about two hundred nursing home patients for services that were never rendered.

Bernhard’s actions clearly violated his 2007 settlement agreement with the government. He pleaded guilty to aggravated identity theft and health care fraud. In addition to the four-and-one-half year prison sentence, he must pay restitution of $1,122,992.08.

This case illustrates some troubling vulnerabilities in the nursing home population. He used the names and other identifying information of nursing home patients as the basis for his false billing statements. The press release from the FBI describing Bernhard’s sentence does not go into detail about how the scheme affected the nursing home patients. Presumably they were simply names that Bernhard appropriated, but it could be possible, in a similar scheme, for someone to actually withhold needed treatment yet bill Medicare for the services. It is also possible that a doctor or other medical professional could order unnecessary treatments in order to pad a bill.

Continue reading " Maryland Podiatrist Sentenced to Four Years in Prison for Scheme Involving Nursing Home Patients " »