Nursing home chain will pay $45 million to quash Medicaid fraud, neglect allegations

A nursing home company has settled with New York’s attorney general to resolve allegations that four of its nursing homes had committed financial fraud and neglected residents for years.

Attorney General Letitia James announced Thursday that Centers Health Care’s owners, landlords, management company, and other partners will pay $45 million to close an investigation of Beth Abraham Center for Rehabilitation and Nursing in Bronx County; Buffalo Center for Rehabilitation and Nursing in Erie County; Holliswood Center for Rehabilitation and Healthcare in Queens County; and Martine Center for Rehabilitation and Nursing in Westchester County.

James’ decision names Kenneth Rozenberg and Daryl Hagler as Centers Health Care’s owners. 

“We are pleased to resolve our litigation, which dismisses all allegations of wrongdoing against Centers. Over the last three decades, Centers has cared for thousands of residents across dozens of facilities, while maintaining the highest standards of care and resident welfare. We are committed to fully implementing the settlement terms, including a significant investment in resident care,” a Centers spokesman told McKnight’s Long-Term Care News.

James originally sued Centers in June 2023 for allegedly misusing Medicaid and Medicare funds to the tune of $83 million. In August, a New York Supreme Court judge threw out the defendants’ arguments to have the case dismissed.

That same month, members of 1199SEIU picketed outside of five other Centers-owned facilities in upstate New York after they said nearly 375 workers were left without contracts in Schenectady, Glens Falls, Troy, New Paltz and Onondaga for almost a year. 

“Residents at these Centers nursing homes endured years of tragic and devastating mistreatment and neglect, while the owners made millions of dollars in profit,” James said in a press release on her website. “Centers’ owners operated the nursing homes with insufficient staffing so that they could pocket tens of millions of taxpayer dollars meant for resident care. Residents suffered tragic harm and their families were often left in the dark or in despair about their loved ones.”

The lawsuit alleged overworked staff members failed to provide residents with basic care, including assistance with eating, using the bathroom, and bathing. 

Within the settlement are clear actions for reform. 

According to the press release, Centers must increase the number of registered nurses onsite at each home and appoint a chief compliance officer at each of the four locations. Rozenberg and Hagler also must pay $8.75 million in restitution to the Medicaid and Medicare programs. 

The pair must also shell out $35 million for a resident care fund. The remaining $1 million may also go into the fund, depending on recommendations from an independent health care monitor, installed in July 2023.

“Now, Centers and its owners will pay for the harm they caused and will continue to make major reforms at their facilities to ensure residents receive the care they deserve. My office will continue our work to make sure that nursing homes are safe and supportive environments for seniors to live out their years with dignity,” James said.

The judgment says Centers and its owners are barred from closing or selling the nursing homes for at least three years.