Officials said the swindle was huge.
In an effort to divert public funds into their own personal charities and pockets, the operators of one of New Jersey’s worst nursing homes allegedly funneled tens of millions of Medicaid dollars meant for resident care into related businesses over a period of years, according to investigators.
However, the care that was being given was terrible, according to those investigators, who painted a somber picture of a facility that was consistently understaffed and where inmates were mistreated or neglected in filthy, depressing circumstances.
A state inspector took action on Thursday to deny Medicaid to the long-stricken South Jersey nursing home.
The Office of the State Comptroller declared it was suspending the owners and operators of South Jersey Extended Care in Bridgeton, along with a second nursing home under the same ownership, Sterling Manor Nursing Center in Maple Shade, and several associated businesses that provided services to them, from Medicaid funding within 60 days after a comprehensive, 70-page report into the allegations was released.
According to Acting State Comptroller Kevin Walsh, this was a huge swindle that had been going on for years. By posing as independent parties, these people were able to accumulate a fortune. In actuality, they functioned as a single entity, giving the elderly, the sick, and the impoverished appalling treatment in order to profit greatly.
One of the associated companies with connections to the owners received almost $10 million to offer nursing and other services, according to the comptroller’s investigation, which listed other abuses. However, it said that on every day that was examined, South Jersey Extended Care, which has a 167-bed license, lacked enough trained employees.
The investigation claimed that unqualified people were occupying critical jobs. A social work director did not hold a social work license. According to the comptroller, the director of nursing was not only not a registered nurse but also had her license as a licensed practical nurse (LPN) suspended for not answering questions about her arrest on prescription forgery charges.
Simultaneously, the comptroller’s inquiry revealed that nearly every significant vendor for the nursing home had ties to the ownership.
According to the investigation, these people paid themselves and their companies millions of dollars for items and services that they never provided, entering into exaggerated contracts with their own companies. Instead, these monies could have been invested in facility upgrades, increased therapy or social activities, or the hiring of more nurses or certified nurse assistants (CNAs) to provide higher-quality care. However, they weren’t.
The transactions, said the report, led the nursing home into financial disaster.
Calls and messages for comment were not immediately answered by the care facility.
A nursing home with poor ratings
The comptroller s office had previouslysingled out South Jersey Extended Careas being among the state s most poorly run, based on the federal government s star-rating system.
Owned by Mark Weisz, it is managed by Steven Krausman through his company, Comprehensive Health Care Management Services, according to the comptroller. According to the comptroller, Michael Konig was a major vendor who supplied the nursing home with a variety of goods and services via Broadway Health Care Management, another business he owned or controlled, and other companies he controlled. Konig was related to both Weisz, his cousin, and Krausman, his brother-in-law.
In 2015, Broadway Health Care wascited by the U.S. Department of Laborwhich found that the Hackensack staffing agency stiffed workers out of overtime pay.
Weisz, though, was just an owner in name only of the nursing home, according to the comptroller. According to the report, Konig continued to operate the facility with Krausman after transferring ownership of his nursing homes in New Jersey. Konig had previously owned the facility until he was prohibited from owning nursing homes in Massachusetts and Connecticut in the mid-1990s after inspectors found significant problems there, including alleged physical and sexual abuse of residents.
READ THE COMPTROLLER S REPORT
Konig and Krausman were in charge of South Jersey Extended Care’s finances, operations, and administration, signing the checks and making the decisions, according to the comptroller, which also claimed to have reviewed tens of thousands of documents, including financial and medical records, and interviewed Weisz, Konig, and Krausman under oath.
According to the comptroller, Weisz appeared to have done little more over the years than occasionally sign documents that were given to him by Krausman and Konig including contracts with their companies. He reported that he has no role whatsoever with South Jersey Extended Care, absolutely no involvement in the day-to-day operations of the facility; and was not hands-on at all. He added that it had been years, years since he had visited the facility.
The entrance to South Jersey Extended Care, which will be stripped by the state comptroller by its Medicaid funding.Google Street View
The comptroller said Konig and Krausman both used their limited liability companies, which on paper look like independent entities, to pull money out of the nursing home by creating provide staffing, management and services to South Jersey Extended Care, as well as and nine other long-term care facilities.
They entered into multimillion-dollar, inflated-cost contracts with businesses they owned and controlled for goods and services their companies substantially failed to provide, said the report. Krausman and Konig were able to avoid scrutiny and maximize their profits, said the report, which found the related businesses routinely overcharged and under-delivered.
Over a five-year period from April 2018 to March 2023, investigators for the comptroller s office said South Jersey Extended Care received $35.6 million in Medicaid funds. At the same time, they spent $38.9 million on contracts with companies owned or controlled by Krausman and Konig, according to the comptroller.
Residents of the nursing home, meanwhile, suffered, said the comptroller s office, noting that funds that could have been used to hire additional staff, improve facilities, or enhance resident programs were instead used for owner distributions, consulting fees, and charitable donations to organizations they controlled.
The comptroller said South Jersey Extended care frequently failed to meet the minimum health and safety standards required by Medicaid. Among the conditions cited was a bedroom reeking of urine with a urine catheter bag lying on the floor, a toilet that had brown debris and paper products with no running water, dirty curtains and/or walls with brown/dark stains, and a refrigerator with a long strand of hair and black particles.
One surveyor, according to the report, found that a nurse s aide had confined a resident with dementia to a bedroom by tying the door handle with a plastic trash bag. Another said a resident in 2020 was allegedly roughly handled by a staff member, fell out of a wheelchair, and ended up in the hospital, with an abdominal injury.
In responses contained within the comptroller s report, Weisz, Krausman, and Konig, through their attorneys, took issue with comptroller s references to the nursing home s poor ranking within CMS star-rating system, and noted that South Jersey Extended Care had improved to 2-stars in its latest overall CMS ranking.
They also argued that they were not related parties and that the contracts in question were actually market-rate, and that the profits they reaped were within acceptable profit margins.
As for the issue of the LPN serving as director of nursing, the comptroller said South Jersey Extended Care submitted a photocopy of an RN license purporting to establish that person s credentials. However, the RN license number appearing on the document was held by someone other than the identified employee, strongly suggesting that the document produced was fabricated, noted the report. Additionally, the state s license verification system indicated that the employee did not hold any license to practice nursing in New Jersey.
Walsh suggested that what was alleged at South Jersey Extended Care was not an isolated incident, urging Gov. Phil Murphy and the state Legislature to enact tougher laws to better scrutinize how public funds are spent.
Because it is very likely that the issues identified here are occurring in other nursing homes that use related entities to hide profits, state government should learn from this investigation and adjust its systems to prevent poor quality care and the waste of public funds, his report said.
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Susan K. Liviomay be reached [email protected]. Follow her on Twitter@SusanKLivio.
Ted Shermanmay be reached [email protected]. Follow him on Twitter@TedShermanSL
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