Morris Park Nursing Home: Changing Coverage After Residents Said No

The Morris Park Nursing Home Medicare Advantage settlement resolved hospital-referral kickback and unauthorized coverage-switching claims for a combined $3.46 million, the Department of Justice announced on May 17, 2023. The Bronx nursing home’s admissions describe residents moved out of plans they had chosen, sometimes after they or their families expressly objected. Inside the facility, the coverage change meant more revenue and payments to the people making it happen.

The owner’s estate agreed to pay $2.85 million, the former administrator $495,000, and an associate $115,000. Those separate agreements resolved the government’s False Claims Act and Anti-Kickback Statute allegations. Each defendant made factual admissions about their own conduct.

This Medicare Advantage fraud case concerns a skilled nursing facility’s effort to increase its Original Medicare population. One scheme brought those patients through the door. The other changed the coverage of residents already inside.

The estate’s settlement took account of Morris Park’s voluntary disclosure of the coverage changes. The estate’s agreement dates that disclosure to July 2020.

Why Morris Park Wanted Original Medicare Residents

Original Medicare usually paid the facility better. In the estate’s settlement, the admissions were specific: Morris Park typically received a higher daily reimbursement rate for Original Medicare residents, who were also often approved for longer stays.

Under Original Medicare, the Centers for Medicare & Medicaid Services reimbursed the skilled nursing facility directly on a fee-for-service basis. Under Medicare Advantage, the facility submitted its claims to the private insurer. Medicare paid that insurer a fixed amount each month for each enrolled beneficiary. The Medicare Advantage payment arrangement puts the plan between Medicare and the facility receiving payment for care.

A 2019 study in the American Journal of Managed Care, Managed Care for Long-Stay Nursing Home Residents: An Evaluation of Institutional Special Needs Plans, explains that a plan responsible for Medicare spending across settings has an incentive to invest in clinical care inside the nursing home and avoid hospital transfers.

Its observational comparison found 38% fewer hospitalizations among residents in the UnitedHealthcare institutional special needs plans studied than among fee-for-service long-stay residents, alongside higher use of skilled nursing services.

Morris Park’s admissions describe a narrower calculation: which coverage paid the facility more for a resident’s stay. The referral payments and disenrollment payments both served that calculation.

Cash for Hospital Referrals

Morris Park paid a Jacobi Medical Center discharge-planning supervisor $150 for each referred Original Medicare patient admitted to the facility during much of the period from 2017 through 2019. The estate admitted that arrangement. The former administrator separately admitted that he personally delivered the cash, often after texting the supervisor to arrange a meeting in a nearby CVS parking lot.

Jacobi’s case managers recommended placements for patients who needed skilled nursing care after discharge. Morris Park’s marketing staff sought referrals from them, and the administrator repeatedly contacted the supervisor when beds were empty. The payment was tied to an admission under the coverage Morris Park wanted.

The government alleged that Morris Park paid the supervisor approximately $5,000 to $10,000 for referring dozens of Original Medicare patients. The relationship also included meals and tickets to Yankees games. The government’s account described food sent to the supervisor’s office and invitations for her and her staff to a facility-sponsored holiday party. The estate’s admissions include messages linking the hospitality to referrals, including a dinner invitation thanking the supervisor and her crew for being good to the facility.

A hospital placement decision had become a paid source of Original Medicare admissions. The administrator’s requests for patients and his deliveries of cash were parts of the same relationship.

Coverage Changes Despite Residents’ Objections

From 2018 through 2019, the government alleged, Morris Park moved residents from their self-selected Medicare Advantage plans into Original Medicare without their consent. The estate admitted that, in several instances, the facility went ahead even after residents or family members said they did not want the change.

The consent problem went beyond whether a form had been signed. The government alleged that staff approached residents, often at their bedsides, to persuade them to switch. Its account said staff typically failed to explain potential changes to co-payments, deductibles, supplemental benefits and drug coverage, or limits on returning to the old plan after discharge.

In most cases, the estate admitted, the facility obtained neither a signed disenrollment form nor another document showing the resident’s consent. Staff sometimes offered to reduce or waive the co-payments residents would owe starting on the 21st day of their stay if they switched to Original Medicare. The agreement also records that Morris Park did not offer to help residents re-enroll in their Medicare Advantage plans when they left the facility.

One exchange makes the administrator’s priorities plain. In July 2019, he instructed the financial coordinator to disenroll a resident who lacked the capacity to consent. The coordinator asked how to do that when the resident was not alert and had no family. His response was:

Who Earned Money When Coverage Changed

Morris Park agreed to pay the associate $1,000 for each resident he helped move from Medicare Advantage to Original Medicare. The former administrator admitted that they agreed to split the payment, giving him $500 per resident, and that he did not disclose the arrangement to the facility.

The associate was the administrator’s friend and worked full-time at another Bronx skilled nursing facility. The administrator brought him in during the summer of 2018. According to the admissions described by the Justice Department, the associate usually relied on Morris Park staff to obtain and document consent, but did not confirm that the resident had consented or signed the form before processing the change.

The pace of disenrollments increased dramatically after he joined the effort. The estate’s admissions include an email in which the administrator forwarded a new Medicare Advantage resident’s information to the financial coordinator with a one-word instruction to disenroll.

The incentive extended to the facility’s payroll. Starting in early 2019, Morris Park paid the administrator monthly cash bonuses when the average Original Medicare resident population stayed at a specified level. Marketing and admissions staff also received bonuses tied to new Original Medicare admissions.

The estate’s agreement identifies the administrator’s other job: compliance officer. The same person responsible for that function was directing the switches, sharing the per-resident payments and receiving bonuses tied to the coverage mix.

The Other Bronx Nursing Home Case

Plaza Rehab and Nursing Center and Citadel Consulting Group agreed to a $7.85 million settlement announced on June 29, 2022. They admitted that staff often failed to obtain consent before disenrolling residents from Medicare Advantage. Citadel also admitted setting a monthly disenrollment quota and identifying residents to switch.

The common incentive was to move residents into the coverage that paid the facility better. Plaza’s quota made the target explicit. Morris Park’s admissions show payments attached to referrals, individual switches and the facility’s monthly resident population.

Both cases show Medicare Advantage steering from the nursing home’s side: the facility earned more by moving residents out of the program.

The Records Behind a Referral or a Switch

An admissions worker, discharge planner, financial coordinator or finance employee may see a different part of the conduct Morris Park admitted. A request to fill an empty bed connects to the referral and admission. A request to change coverage connects to the resident’s stated choice, the consent documentation and the payment for making the change.

We connect referral messages, residents’ objections and payment records to show who directed the changes and who benefited.

For a healthcare insider, knowledge of the routine matters: who asked for the switch, who spoke to the resident, who processed it and who received the money. We work with that knowledge to connect the health care decisions and the financial incentives in a whistleblower case.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw Who Wanted the Switch

If you saw residents’ objections overridden or payments tied to their coverage, speak to one of our whistleblower experts about how the switches were made. We build the case with you and bring in Medicare Advantage whistleblower lawyers who understand nursing-home referral payments and coverage changes. We stay beside you through the whole journey to build your strongest nursing home whistleblower case.