Due to million-dollar fines, bankrupt retirement home chain prepares for sale

One of Iowa’s largest nursing home chains, now mired in bankruptcy, owes taxpayers more than $1 million in unpaid fines over poor quality resident care, according to the federal government.

QHC Facilities, which has eight skilled nursing facilities and two assisted living centers in Iowa, filed for bankruptcy in late December. Business owner Nancy Voyna died a few weeks after the business filed for bankruptcy and her son is now pursuing the sale of the business and all of its assets.

The 10 facilities have a combined capacity of nearly 750 residents.

A potential obstacle to a sale is outlined in recent court filings by the US Department of Health and Human Services and the Centers for Medicare and Medicaid Services. Both agencies provide QHC with a significant portion of its revenue through Medicare and Medicaid payments for resident care.

According to CMS, two of QHC’s eight skilled nursing facilities – one in Mitchellville and one in Winterset – recently faced termination of the Medicare program, which would have cut off all federal funding flowing into these homes for care. residents. The potential terminations were “based on quality of care issues and mold issues, says CMS.

CMS filings say that during a visit last year to QHC Mitchellville, state inspectors identified 10 deficiencies related to Medicare program participation and three deficiencies that posed an “immediate threat to the health and safety of residents.

When inspectors returned to Mitchellville in early December, they identified five deficiencies that had “the potential to cause more than minimal damage to the health and safety of residents,” according to CMS.

A second visit took place on January 31, and state records indicate the home was again found to fail to meet minimum standards. However, inspectors returned for a third return visit on Feb. 15 — three days before the deadline for the home to comply or lose Medicare and Medicaid funding — and the home was cited for zero federal violations, reporting that she was back in compliance.

Court records say the Winterset facility faced a March 15 deadline to come into compliance or lose its federal funding. This was partly due to gaps in care reported by inspectors last September. The issues were around infection control and failure to meet pain management standards that were part of a “pattern of real harm to residents”, according to CMS.

In January, state inspectors returned to Winterset’s home and documented at least 29 additional deficiencies — all but one of which were deemed to cause “more than minimal damage.” Two shortcomings were considered “isolated incidents of actual harm to residents”.

State records indicate that when inspectors returned to the home in February in response to the complaints, all previously noted deficiencies had been corrected, the complaints were not verified, and the home was back in compliance with standards. minimal.

Although both homes appear to have avoided termination of the Medicare program, CMS objected to some of QHC’s plans to sell the chain, noting that nothing in the proposed process addresses the potential impact of termination of the Medicare program. by Mitchellville and Winterset on sale.

The agency also notes that QHC owes the federal government $85,000 for Medicare “advance payments” it collected, plus $1,176,000 for fines related to quality of care violations. The company could also be required to return relief funds to suppliers it has raised to help it respond to the COVID-19 pandemic.

Before her death, Voyna said in court papers she had recently discovered that QHC had failed to pay a series of quarterly fees owed to the state, leaving an accumulated debt of $4 million. This issue is not addressed in the CMS filings, and state attorneys did not raise the issue with the bankruptcy court.

The judge presiding over the bankruptcy case ordered that any sale be subject to court approval and that if more than two facilities are included in the sale, the purchase price of each facility must be specified. If Mitchellville or Winterset are terminated from the Medicare program before the sale closes, their Medicare-provider agreements will be excluded from the sale.

The bankruptcy court receives detailed reports of patient care issues at QHC facilities from a court-appointed mediator. However, all of his reports are filed with the court under seal and are not available to the public.

Additionally, the Iowa Department of Inspections and Appeals, which oversees nursing homes, told the judge it could also file reports with the court about patient care issues, but these will also be filed under seal.

In recent years, QHC homes have been hit with some of the largest federal fines ever levied against an Iowa nursing home chain, with inspectors saying the company immediately put residents at risk due to care of inferior quality. At the same time, however, the company sued its elderly residents for non-payment for such care.

State inspectors alleged last year that the Mitchellville home was sometimes staffed with just one low-level caregiver to care for 40 or more residents.

At the time, the director of nursing reportedly told inspectors the house was ‘falling apart’ with ‘residents bedridden and weakened with no one to help them’. A nursing assistant told inspectors that ‘everything in the facility is a mess’ and a graduate nurse reportedly described the situation to inspectors as ‘free for all, with no leadership from management’.

QHC’s 10 facilities in Iowa are QHC Mitchellville; QHC Winterset North; QHC Winterset South; QHC Madison Square; QHC Fort Dodge Villa; QHC Crestridge; QHC Crestview Acres in Marion; QHC Humboldt North; QHC Humboldt South; and QHC Villa Cottages of Fort Dodge.

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