Bankrupt Nursing Home Chain Ready for Sale Amid $1 Million in Fines – Iowa Capital Dispatch | Vette Leader

One of Iowa’s largest nursing home chains, which has now filed for bankruptcy, reportedly owes taxpayers more than $1 million in unpaid fines for poorly caring for residents, the federal government says.

QHC Facilities, which owns eight specialty care facilities and two assisted living centers in Iowa, filed for bankruptcy in late December. The company’s owner, Nancy Voyna, died a few weeks after the company filed for bankruptcy and her son is now seeking a sale of the company and all of its assets.

The 10 facilities together have a capacity of almost 750 residents.

A potential roadblock to a sale is outlined in recent court filings from the US Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The two agencies provide QHC with a significant portion of its revenue through Medicare and Medicaid payments for resident care.

According to CMS, two of QHC’s eight qualified nursing facilities — one in Mitchellville and one in Winterset — were recently terminated from the Medicare program, which would have halted all federal funding flowing into those homes for inpatient care. The potential terminations were based “on quality issues and mold-related issues,” says CMS.

The CMS filings say that during a visit to QHC Mitchellville last year, state inspectors found 10 deficiencies related to participation in the Medicare program and three deficiencies that posed an “imminent threat to the health and safety of residents.”

When inspectors returned to Mitchellville in early December, they found five deficiencies that had “the potential for more than minimal damage to the health and safety of residents,” according to CMS.

A second revisit took place on January 31 and state records show that the home again failed to meet minimum standards. However, inspectors returned for a third return visit on Feb. 15 — three days before the home’s deadline by which it would maintain or lose Medicare and Medicaid funding — and the home was subpoenaed with zero federal violations, signaling that it was compliant again.

Court filings show the Winterset facility faced a March 15 deadline to comply with regulations or lose its federal funding. That was based in part on maintenance deficiencies that inspectors reported last September. The issues involved infection control and failure to meet pain management standards, which CMS said were part of a “pattern of actual harm to residents.”

In January, state inspectors returned to the Winterset home and documented at least 29 other defects – all but one of which presented the potential for “more than minimal damage”. Two shortcomings were considered “single incidents of actual harm to local residents”.

State records show that when inspectors returned to the home in February in response to complaints, all previously identified deficiencies had been addressed, the complaints were not investigated, and the home returned to minimum standards.

Although both houses appear to have avoided terminating the Medicare program, CMS has objected to some of QHC’s plans to sell the chain, noting that nothing in the proposed proceeding addresses how the potential termination of the Medicare program of Mitchellville and Winterset would affect sales.

The agency also notes that QHC owes the federal government $85,000 for Medicare “advance payments” it collected, plus $1,176,000 for fines related to quality of care violations. The company may also need to repay vendor aid funds it raised to help it respond to the COVID-19 pandemic.

Before her death, Voyna stated in court filings that she recently discovered that QHC had failed to pay a number of quarterly dues owed to the state, leaving a cumulative debt of $4 million. This issue is not addressed in the CMS filings, and state attorneys have not raised the issue in the bankruptcy court.

The judge in charge of the bankruptcy proceedings has ruled that any sale is subject to court approval and that if more than two establishments are involved in the sale, the purchase price for each establishment must be declared. If Mitchellville or Winterset is terminated from the Medicare program before the sale is complete, their Medicare provider agreements will be barred from the sale.

The bankruptcy court receives detailed reports on patient care issues at the QHC facilities from a court-appointed ombudsman. However, all of their reports are submitted to the court sealed and are not publicly viewable.

Additionally, the Iowa Department of Inspections and Appeals, which oversees nursing homes, has informed the judge that it may also file reports with the court on patient care issues, but those too will be filed under seal.

In recent years, QHC homes have been hit with some of the largest federal penalties ever imposed on an Iowa nursing home chain, with inspectors saying the company has put residents in imminent danger due to substandard care. At the same time, however, the company has sued its elderly residents for not paying for this care.

State inspectors claimed last year that the Mitchellville home was at times attended by just a low-ranking nurse caring for 40 or more residents.

At the time, the director of care reportedly told inspectors the home was “falling apart” with “bedridden, debilitated residents with no one to help.” One nurse told inspectors that “everything at the facility is a mess,” and a registered nurse reportedly described the situation to inspectors as “free from everyone, with no leadership from management.”

QHC’s 10 facilities in Iowa are QHC Mitchellville; QHC Winterset North; QHC Winterset South; QHC Madison Square; QHC Fort Dodge Villa; QHC Crestridge; QHC Crestview Acres in Marion; QHC Humboldt North; QHC Humboldt South; and QHC Villa Cottages by Fort Dodge.

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