LITTLE ROCK -- Three nursing homes in Arkansas -- and others across the country -- accepted tens of thousands of dollars in federal coronavirus financial aid even though the facilities had closed before the pandemic started, according to federal data.
An operator behind two of the Arkansas homes, in Hope and Horseshoe Bend, which received nearly $32,000 combined, returned the money after being asked about it, the operator's attorney said last week.
A second company, which accepted about $42,000 for a closed nursing home in Ola, is awaiting federal guidance on what to do next, its attorney said.
The facilities were included on a public list of more than 1,400 Arkansas providers who shared in an initial $50 billion distribution of relief grants set aside by the federal Coronavirus Aid, Relief and Economic Security Act. In total, Congress has allocated $175 billion to help health providers nationwide weather the crisis.
To ship out the cash quickly, officials sent a first round of money that automatically went to all health care providers who billed Medicare in 2019. None had to apply -- the choice was simply to accept or reject the money, according to U.S. Department of Health and Human Services guidance to providers.
Providers who accepted the cash appeared on a public list of recipients. To accept, they had to agree to spend money only "to prevent, prepare for and respond to coronavirus" and state they provided care "after January 31, 2020" to people who had been or could be infected, according to the program's terms and conditions.
The three Arkansas nursing homes closed in December, months before the state reported its first confirmed coronavirus case March 11.
A Health and Human Services spokesman said the agency will "seek recoupment" of money paid to providers of facilities confirmed as closed.
"Many of the providers that are not operating have already returned the funds, and if an institution is closed and their bank account is also closed, the funds are automatically returned," the spokesman said. "For future funding allocations, HHS is establishing a process to exclude the known closed organizations from our files."
Eric Bell, attorney for Reliance Health Care, which received the nearly $42,000 for the closed Ola home, said the company is in conversations with the federal government and "will take necessary action" based on that guidance.
"There is a 30-day window that has not yet lapsed to return the funds if they were received in error," Bell said.
Reliance, one of the state's largest nursing home chains, operates nearly three dozen facilities.
Reliance also received about $125,000 in CARES aid for Lexington Place Healthcare and Rehabilitation in Jonesboro. That facility closed March 29, state Department of Human Services spokeswoman Amy Webb said.
At least four other nursing homes across the country received coronavirus aid despite closing in 2019, according to a review of national closings and aid databases.
The findings come as Washington sends more coronavirus cash to nursing homes.
On Thursday, U.S. Health and Human Services said it would distribute tens of thousands more to each nursing home to compensate for falling census numbers, according to an emailed notice. Each facility was told to expect a minimum of $50,000, plus an additional $1,800-$2,000 per bed.
The Health and Human Services spokesman said the agency has "expedited payment" of CARES Act money to help "providers on the frontlines." Accountability groups have said they are concerned by a lack of oversight written into the legislation.
The inspector general for the Health and Human Services Department announced Friday a planned audit of the first $50 million sent to health providers.
'RECENTLY CLOSED'
Reliance accepted the money for Deerview in Ola (in Yell County) and Lexington Place in Jonesboro, said Bell, its attorney.
Those homes were among five the Arkansas Department of Human Services seized in September and October from a different operator, Keith Head of Conway, amid a financial crisis.
The state tapped Reliance to operate all five during the takeover. Deerview closed in December and Lexington Place followed in March.
Reliance's billing department accepted the money to acknowledge it was received, Bell said.
"Due to the fact the facilities were recently closed, Reliance has kept the funds in-tact in the accounts in which they were deposited and is currently seeking specific guidance on how to handle the fact that these two providers have recently shuttered operations," Bell said.
Cathy Parsons of Greenbrier accepted the nearly $32,000 for Diamond Cove in Horseshoe Bend and Oaklawn Estates in Hope.
Those nursing homes closed in December, moving their residents to other facilities, amid a showdown between the state and an out-of-state operator named Chris Brogdon.
Parsons planned to transfer the facilities to Brogdon, but the state objected. Brogdon then pulled his support from the nursing homes.
Parsons said earlier this month she would send back the money if the federal government asked for it.
"If it goes back, it goes back," Parsons said. "That's about the extent I'm going to say, because I've done nothing wrong. ... If they ask for that money back, it will go back."
She referred other questions to her attorney, Dylan Potts, who said Thursday that Parsons had returned the money "after further information was provided by [the federal Centers for Medicare and Medicaid Services] to Ms. Parsons."
Parsons also accepted money on behalf of Bear Creek Healthcare in De Queen, a facility she still operates. She hasn't returned that money, Potts said.
ACCEPT OR REJECT
The first phase of CARES Act money functioned on an honor system.
All providers across the health-care spectrum who billed the federal Medicare insurance program in 2019 automatically received payments based on two distinct formulas drawn from their billings. Those providers included hospitals, doctors' practices, pharmacies and nursing homes.
The payments came with federal guidance advising providers of a choice: Accept the money or reject it. Providers who accepted the money were publicly disclosed, while those who rejected it weren't.
"The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and that the Payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus," one of the terms says.
Karyn Schwartz, a senior fellow at health policy nonprofit Kaiser Family Foundation, said she hasn't specifically looked into the issue of closed facilities receiving payments.
Schwartz, who said she's not a lawyer, said the terms and conditions for accepting the money include a cutoff date saying the money is for services provided after Jan. 31.
"So if a provider shut down in 2019 or earlier, they wouldn't be eligible," she said.
Some of those providers, she went on, may still have been in the Centers for Medicare and Medicaid Services system based on documents they reported for that calendar year.
Since the "first tranche" of money was doled out based on Medicare revenue those entities received in 2019, some facilities that closed "may have still gotten the money -- and they are supposed to pay it back," she said.
The Health and Human Services spokesman said the agency "reserves the right to audit" the recipients and it can work with federal investigators "to recoup funds and address fraudulent activity."
OTHERS IDENTIFIED
After finding the closed Arkansas nursing homes on the list of providers receiving relief money, they were compared against a national database of 166 nursing home closures in 2019.
At least four nursing homes in Ohio and Wisconsin were identified as having closed but accepted money -- combined, they received about $46,000.
The number of closed nursing homes outside Arkansas accepting aid is likely higher. Two states, Mississippi and Missouri, didn't respond to inquiries.
The count also omits two companies owning closed nursing homes but operate other facilities, such as a psychiatric hospital, at or near the same address.
Additionally, some parent companies with several nursing homes, some of which closed in 2019, received lump-sum payments. It couldn't immediately be determined whether those sums included money for the closed facilities.
The payouts are ongoing. Not all nursing homes have either accepted or rejected the money -- those that don't respond within 45 days of receipt will be assumed to have accepted, according to federal guidance. So it's possible more nursing homes will appear on the list as accepting the federal CARES money.
The fact federal agencies are providing detailed data on who's receiving the money is more than Congress initially required, said Schwartz, of the Kaiser Family Foundation.
About $72 billion of the $175 billion set aside has been distributed, she said.
Several of the payments received by providers are less than $150,000. Thus far, Health and Human Services has required only entities receiving payments exceeding that amount to submit detailed reports about how they spent the money.
It's not known yet whether the reports that are submitted will made widely available, Schwartz said.
"How much information we'll get from those providers -- what the public will see -- is still unclear."
NW News on 05/26/2020