Nursing home chain settles after deaths

Advocates for nursing home residents charge that Beverly Enterprises, Inc. is a corporation run with the same penny-saving, profit-maximizing philosophy as a fast-food chain and are praising California’s attorney general for pushing reforms.

The largest nursing home chain in the country agreed last week to pay more than $2 million in fines and civil penalties and improve conditions in its 60 California facilities, one of which is in Chico.

The civil and criminal settlement, negotiated by the state Attorney General’s Office, came after two elderly residents of a Santa Barbara nursing home died, one from infected bed sores and another from complications due to improper tube feeding procedures. The Arkansas-based chain, in pleading “no contest,” didn’t admit any wrongdoing.

The best thing about the settlement, said Prescott Cole, staff attorney for California Advocates for Nursing Home Reform, is that Beverly can’t just close the Santa Barbara facility (it recently sold) and move on; it must conform to the new oversights if it wants to keep doing business in California. “If you want to affect the way a chain does business, you have to make it chain-wide,” Cole said. “This moves things. It breaks the pattern.”

Attorney General Bill Lockyer stated in a press release, “This case is about corporate accountability and protecting Californians who deserve and depend on compassionate and quality care in nursing homes.” The Beverly facilities now have to implement more training, higher staffing levels, better care and give progress reports.

John Crowley, the executive director of the Beverly Manor Convalescent Hospital on Cohasset Lane in Chico, said the settlement “shouldn’t have any effect on the Chico facility.” That, he said, is because, “We’re already adhering to the staffing standards and we do provide quality care.”

In March 2002, the Chico facility was cited for an A-level violation of patient care standards and fined $16,000. (An AA citation is the worst, then A and finally B.)

In a prepared statement, Dave Devereaux, executive vice president and chief operating officer of Beverly Health and Rehabilitation Services, said there was no criminal intent or action and the chain settled “rather than fight a lengthy court battle that ties up financial and human resources that should be dedicated to caring for the elderly.”

But Cole said that Beverly has focused on cutting costs even as its president and CEO, William Floyd, draws a $1.3-million-a-year salary. Floyd ran the Taco Bell Corporation from 1995-1996, and other Beverly executives hail from OfficeMax, Fleetwood Enterprises and Cracker Barrel. Few have health care backgrounds.

The latest settlement is pocket change compared to the $175 million Beverly paid in 2000 after pleading guilty to criminal charges that the company billed Medicare for nursing care of patients who were not actually on Medicare.

This is the second time in as many years that Lockyer has taken action against a nursing home chain with ties to Chico. In 2001, after two people died following a Burlingame heat wave, the Sun Healthcare Group agreed to pay $2 million a year to step up care at its California facilities, including Sun Health Care’s Chico Creek Care and Rehab. In 2001, The Chico Creek Care home received two AA-level citations and was fined $130,000 for hydration/nutrition deficiencies and neglect.