New York’s Attorney General announced on November 14, 2024 a settlement with four New York nursing homes managed by Centers for Care, LLC (“Centers”) that will require them to pay $45 million and address years of resident mistreatment and neglect. The Office of the Attorney General’s (OAG) investigation revealed significant financial fraud and chronically insufficient staffing at four Centers nursing homes: Beth Abraham Center for Rehabilitation and Nursing (Beth Abraham Center) in Bronx County, Buffalo Center for Rehabilitation and Nursing (Buffalo Center) in Erie County, Holliswood Center for Rehabilitation and Healthcare (Holliswood Center) in Queens County, and Martine Center for Rehabilitation and Nursing (Martine Center) in Westchester County.
Centers and its owners will pay a total of $45 million, including $35 million to directly fund improved resident care and staffing. Centers will also increase staffing and continue to make reforms as directed by an Independent Health Care Monitor (IHM). The Independent Financial Monitor (IFM) will also continue to oversee the nursing homes’ finances. The IHM and IFM were appointed by the court in July and August 2023, respectively, as a result of OAG’s lawsuit and have already improved resident care at the nursing homes. Centers and its owners are also prohibited from closing or selling the facilities for at least three years. This is the third case in which OAG has secured major reforms at nursing homes in New York.
New York Attorney General Letitia James filed a lawsuit against Centers in June 2023 for significant financial fraud and repeated illegality including resident neglect, insufficient staffing, and failing to limit admissions to residents to whom they could provide adequate care. Shortly after filing the lawsuit, a court granted OAG’s motion for a preliminary injunction to immediately address the ongoing issues at the facilities, including installing both an Independent Health Care Monitor and an Independent Financial Monitor to oversee facility operations and finances. Since those monitors began this oversight work in July 2023, the Independent Health Care Monitor has made recommendations that the nursing homes and Centers have implemented, notably increasing the number of staff and improving resident care at the nursing homes.
The OAG’s lawsuit alleged that Centers’ owners and operators violated laws designed to protect residents. This includes failing to deliver adequate care to their residents, operating the nursing homes with insufficient staffing to provide required care, continuing admissions of residents to the nursing homes even though they operated with insufficient staff to provide required care to existing residents, and committing and tolerating countless acts of neglect against residents of the nursing homes. The lawsuit alleged that overburdened staff members were assigned to more residents than they could care for and often failed to help residents with the basic activities of daily living, such as using the bathroom, eating, and maintaining personal hygiene. Call bells regularly went unanswered, residents were forced to sit in their own urine and feces for hours, meals were not provided in a timely manner, and personal belongings, including hearing aids, dentures, and clothing, were often lost or stolen. Residents, visiting family members, and staff reported unsanitary conditions, including neglected food trays, vermin, flies, and persistent smells of human waste.
The lawsuit also alleged that the owners of Centers Health Care, Kenneth Rozenberg and Daryl Hagler, and related parties engaged in multiple fraudulent schemes to divert tens of millions of taxpayer dollars from the nursing homes, including collusive real estate arrangements, unnecessary and exorbitant loans with inflated interest rates, phony fees paid to companies they and their family members own, and inflated salaries paid for work that was not performed. Meanwhile, the owners disregarded and violated regulations that required them to operate the homes with sufficient staff to provide all necessary and required care to current residents.
Centers, Kenneth Rozenberg, and Daryl Hagler will pay $45 million, including $8.75 million in restitution to the Medicaid and Medicare programs and $35 million to a Resident Care Fund to be used to support recommended reforms to the facilities. If necessary to accomplish the IHM’s recommendations, Centers and the owners will contribute another $1 million to the fund.
Under the settlement, the IHM installed in July 2023 will continue overseeing the nursing homes through at least July 31, 2026. For two years after that, the nursing homes are required to maintain the staffing levels recommended by the IHM, including increased Registered Nurse positions. In the meantime, the IHM will monitor the nursing homes and make recommendations to increase quality of care, staffing levels, supervision, training, and compensation to prevent poor working conditions. The nursing homes and their owners will be required to implement the IHM’s recommendations. The IHM will also make specific recommendations to further increase direct care and supervisory staff and compensation as needed to ensure residents are receiving proper care and that the nursing homes are not regularly using agency or temporary staff.
If you or a loved one may have been injured as a result of medical malpractice in a nursing home in New York or in another U.S. state due to a nursing home infection, nursing home fall, nursing home aspiration, nursing home neglect, nursing home negligence, nursing home abuse, nursing home under-staffing, or the nursing home failing to properly care for a vulnerable adult, you should promptly find a New York medical malpractice lawyer, or a medical malpractice lawyer in your state, who may investigate your nursing home medical malpractice claim for you and represent you or your loved one in a nursing home medical malpractice case, if appropriate.
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