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Cheltenham Nursing neglected Medicare patients for years

Federal nursing home regulators fined the Cheltenham Nursing & Rehabilitation Center in Philadelphia $824,213 for failures related to the suicide of an elderly patient in June 2018 at the East Olney facility. It was the second largest fine against a U.S. nursing home in 2018.

Cheltenham and its parent company, an Ohio nonprofit called the American Health Foundation Inc. (AHF) have not paid that fine, a spokesman for the Medicare and Medicaid Service Centers said.

The agency is still trying to collect the money.

Now, the U.S. Department of Justice is also prosecuting Cheltenham and two Ohio-affiliated nursing homes for even larger actions with a False Claims Act lawsuit, filed June 14 in Philadelphia. The lawsuit alleges that staff neglected patients for years and allowed them to live in a pest-infested building, while the AHF, which charged millions in Cheltenham management fees, put relentless pressure to reduce nursing costs.

In addition, the Justice Department accused Cheltenham of failing to provide the necessary psychiatric care, contributing to the 2018 suicide, and of giving residents unnecessary antibiotics and antipsychotics, of not protecting residents ’belongings, and of subjecting residents to verbal abuse. .

“This is a very bad place,” said Toby Edelman, a senior policy attorney in the Washington office of the nonprofit Center for Medicare Advocacy. “I couldn’t read it. I started to get so agitated,” Edelman said of the 144-page civil lawsuit.

Edelman and other advocates for the elderly said the lawsuit points to a systemic failure in the nursing home regulation system, as Cheltenham, long known as a troubled facility, has allowed to continue to provide poor care for so long, but they also said they were encouraged by the Justice Department to pursue the AHF through its Senior Justice Initiative.

“It was time,” said Sam Brooks, who worked in the Community Legal Services of the Philadelphia Aging and Disability Unit and is now policy director of the National Consumer Voice for Quality Long-Term Care, a nonprofit organization. Washington works. He said the Justice Department lawsuit covers issues that were complained to state inspectors a few years ago.

The Justice Department did not answer questions from The Inquirer, such as whether Cheltenham, with 255 beds, had improved its attention since the period covered in the lawsuit. The lawsuit does not specify how much money the government is asking for. During the fiscal years 2016 through 2018, Cheltenham received more than $ 45 million in Medicaid and $ 9 million in Medicare, state financial reports show.

J. Michael Haemmerle, who is listed as a Cheltenham administrator in his latest Medicaid cost report in Pennsylvania and as a member of the AHF board in that organization’s latest 990 tax return, said AHF is proud of the attention paid to its facilities.

“The American Health Foundation denies the allegations made by the Department of Justice and will vigorously defend this matter,” Haemmerle wrote in an email, the LinkedIn profile says he is president of Dublin, Ohio-based Abbington Assisted Living.

As part of their argument that AHF administrators in Ohio were negligent, Justice officials highlighted the $ 3.6 million Cheltenham paid to two AHF entities: AHF Management and AHF Home Office, from 2016 to 2018.

During that period, Cheltenham had a total net loss of $ 2.27 million, according to records available on, which collects financial information from federal nursing home cost reports. “But because of the fees the AHF imposed on the nursing home, Cheltenham would not have suffered any losses,” the complaint said.

Advocates have urged federal and state governments to make it easier to track the amounts of money that nursing homes pay to affiliates to get a better picture of the industry’s financial situation. They saw the AHF complaint as a sign that this approach is consolidating.

Federal tax returns from AHF and affiliates show that AHF and other nonprofit affiliates paid $ 3.6 million to J. Michael Haemmerle and other executives and board members between 2016 and 2018, found The Inquirer. Other executives and directors are Haemmerle’s father and uncle. The president of AHF Management is Suzanne Lehman. Her husband is on the AHF boards and her son also works at the company.

AHF’s other nursing homes, including one in southwestern Pennsylvania, also paid dues to AHF.

The Haemmerle and Lehman families, both with long careers in caring for the elderly, are unrelated, J. Michael Haemmerle said. The two families formed AHF in 1988 and in 1996 had acquired 16 nursing homes and three assisted living facilities through 10 non-profit holdings;

AHF bought Cheltenham in 1990 for $ 9.5 million.

In recent years, the nonprofit AHF has kept Cheltenham under strict financial control while creating reserves of $ 16.5 million in December 2017, with plans to invest $ 11 million, according to the complaint.

“Instead of reducing or restructuring its management fees, AHF Management regularly pressured the management of Cheltenham’s facilities to reduce costs and simultaneously increase the number of residents in the building,” the complaint said.

No more recent comparable data on cash reserves were available, but the Cheltenham federal cost report for the year ended June 30, 2019 shows that the facility had enough cash on hand to continue funding. the business for 174 days with no new revenue. That compares to a 28-day state average this year, according to a report from the Pennsylvania Department of Health.

Citing communications between local Cheltenham executives and executives in Ohio, the complaint argues that “AHF and AHF management typically focused more on Cheltenham’s financial health than on the actual health of Cheltenham residents.”

An AHF manager urged the then Cheltenham administrator to accept fewer patients with a “Walkie Talkie,” that is, those who can walk and talk, as a way to get better Medicaid rates, even though the installation already had little staff.

Unlike many cases of false claims, the case against AHF does not focus on traditional overcharging. Rather, the government sued AHF to recover money paid for “non-existent or very deficient services”, sometimes also called “worthless services”.

The focus on worthless services for nursing home executions originated in the mid-1990s in Philadelphia, when David R. Hoffman, then an assistant U.S. attorney, sued Tucker’s manager. House, a nursing home in northern Philadelphia, to take money from Medicare and Medicaid. but did not provide adequate nutrition and wound care to three resident beds.

Quantifying financial damage to the government is not easy in these cases, Hoffman said.

As examples of the problems at the AHF facilities, the lawsuit includes a list of 104 alleged false claims for 13 patients, nine of them from Cheltenham. Cheltenham accounted for $ 403,096, or 85%, of the total of $ 473,732 in alleged false claims. During the period covered by the lawsuit, the AHF facility made 10,000 claims to Medicaid and Medicare, according to the complaint.

“Are they just these people or is it every dollar they received during the relevant time period?” That’s a key question in a case like this, Hoffman said.

If the government wins its case, AHF could have to return three times the amount it received from Medicaid and Medicare for “much inferior or non-existent services,” and also pay fines ranging from $ 12,537 to $ 25,076 for each violation. .

The general question is this, according to Hoffman: “Are they entitled to money when they conscientiously neglect people?” For him, the answer is obvious.

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