In case you missed it, The Washington Post recently published a scorching investigative report on Brius Healthcare, which, with 80 nursing homes in California, including four in Humboldt County, is the state’s largest for-profit nursing home operator.
The story details how Brius received more than $800 million in Medicare and Medicaid funding in 2018 to care for residents at its 80 homes and spent more than 70 percent of it paying “so-called related parties — companies they or their family members partially or wholly own” in a scheme to increase profits. The Post‘s analysis found that Brius homes pay about “40 percent more per bed on average to related parties than other for-profit nursing homes in California.” While the Post notes it is “impossible to determine profits or losses” from any of these privately held related companies from the public record, tax returns “offer a glimpse.”
The Post‘s investigation found that in 2013 alone, Shlomo Rechnitz, Brius’ owner, and his wife reported income of at least $31 million from four of these related companies that regularly provide services to Brius’ nursing homes. In 2018 alone, the Post reports, Brius paid more than $100 million to dozens of related companies “for everything from medical supplies to rent.”
The article points to a local example:
“In the Eureka area in Northern California, a company managed by Rechnitz in 2011 leased five nursing homes, agreeing to pay the property owner a total of $3 million in rent per year, state records show. Rechnitz’s company then subleased the buildings to the nursing homes for $3.5 million — hundreds of thousands of dollars more than his company was paying the property owner, records show.”
Some of the Post‘s exhaustive bombshell report should come as no surprise to regular Journal readers, as it echoes the findings of years of award-winning local reporting on Brius’ Humboldt County properties. (Huge hat tip to former Journal staff writer Linda Stansberry, whose pieces “The Shut Out,” which detailed Brius’ efforts to refuse to accept new patients as a leverage point in reimbursement negotiations, and “The Case of the Missing $5 Million,” which exposed Rechnitz’s profiting from related-party transactions while complaining his local companies were operating at a deficit, which won back to back Best Investigative Reporting awards from the California Newspaper Publisher’s Association in 2016 and 2017. (Stansberry’s subsequent “Bluffing” explored Rechnitz’s “high-stakes gamble with patient lives” and California’s inability to provide effective oversight.)
Brius Healthcare owns Granada Rehabilitation and Wellness, Seaview Rehabilitation and Wellness, Eureka Rehabilitation and Wellness and Fortuna Rehabilitation and Wellness, holding a virtual monopoly on skilled nursing facilities in Humboldt County.
The Post‘s story also features comments from Michael Wasserman, a geriatrician who served as CEO of a company that provides administrative services for Brius’ homes and defended the quality of the company’s local patient care in a 2018 interview with Stansberry early in his 18-month tenure with the company.
Wasserman told the Post he ultimately quit because he had “little control over the quality of patient care.” In March, as COVID-19 began to spread through the U.S., according to the Post, “Wasserman reached out to the California Department of Public Health with a stark warning: ‘I ran a billion-dollar nursing home chain that presently is scaring the daylights out of me.'” The article states that Wasserman then offered a list of Brius homes he was particularly worried about.
It’s unclear if any local facilities were on Wasserman’s list of concerns, but Granada Rehabilitation and Wellness in Eureka has seen a large and deadly COVID-19 outbreak that at last official tally had infected 99 residents and staff members, and claiming the lives of a dozen residents. Local health officials have said Granada’s staff did all it could to prevent the virus — which has decimated nursing homes and long-term care facilities throughout the country — from entering the facility and, when it did, to contain the outbreak.
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This article appears in Top 10 Stories of 2020.
In 2018, at age 90, my mom spent 7 weeks at Eureka Wellness and Rehab recovering from broken hip surgery. What a hellhole of a place; crowded, dirty, understaffed, rooms mixed with patients trying to rehab with senile and deranged lifers. We had to be there every day to make sure my mom received the PT she was entitled to. It was really sad place, I felt for both the patients and the over-worked staff. I’m glad my mom survived it and was able to return home.
Your story isn’t alone, trust me. There are many, many similar stories that sound all too comparable. How they get away with elder/patient neglect and abuse (and that is exactly what it is), is beyond me. I can’t say that it should be shut down because the community is strained as it is, however, it should be taken out of the hands it’s in currently and completely revamped from top to bottom. That’s for certain.
So many years of abuse and so much silence from local elected and appointed officials.
Oh, that’s right, they’re too busy representing the residents that count.
Have they approved the next sprawl in Cutten yet, making our roads less safe?
The next mega-grow draining and polluting our headwaters?
The next highway project for massive trucks to enter Eureka’s Hwy 101 deathtrap?
Do we have enough national poverty-wage chains yet: hotels, drive-through’s, burger joints and more pizza?
How many hours has Eureka’s new city manager and staff spent fussing over the new multi-million dollar “sky-walk” in Sequoia Park?
Busy busy busy
Thank you NCJ
Give em the rope.
This Shlomo Rechnitz is really something. He is the icon of what none of us want in healthcare management. Oversight and organizational structure requirements cannot wait to be put in place. Long term care and skilled nursing facilities should reflect the model all hospitals in the United States follow for health and safety standards. Aging baby boomers are straining the system and may very well be the catalyst to change. Forcing self-interested parties out of the system and ensuring the minimal standards we all expect in healthcare. Starting immediately.
I have in my possession many photos of Elder Abuse in one of the Bruis Healthcare facilities, from charge nurses asleep on the clock. 6 elopement patients one came uo missing in DON office. wanna see my photos let me know when I contacted the State of California 27 tags were found just from me contacting the state now I cant get a job in healthcare in Sacramento