On January 7, 2010, the U.S. Attorney’s Office for the Eastern District of Missouri announced that Cathedral Rock, a Texas corporation that operates five nursing homes, pled guilty to felony health care fraud related to the corporation’s “failure to provide adequate care to the Medicare and Medicaid residents living in those homes.” In the plea agreements, the nursing homes admitted:

  • The homes did not always have sufficient staffing to provide adequate nursing care;  
  • Wound care was not always provided;  
  • That residents often did not receive their medications as prescribed
  • Medical records were falsified and that one nursing home had a “charting party” to fill in gaps in medical records to make it appear that all medication had been properly given; and  
  • The nursing homes submitted fraudulent claims to Medicare and Missouri Medicaid for services not provided or that were worthless.  

The corporation no longer operates any of the nursing homes. The corporation’s majority owner, C. Kent Harrington also entered into a criminal deferred prosecution agreement for two years. The corporation and Mr. Harrington agreed to jointly pay $1 million in criminal fines and penalties. In addition, Cathedral Rock and Mr. Harrington also will pay $628,000 to resolve civil allegations of:  

  • Lack of adequate and properly trained staff at the nursing homes;  
  • Widespread falsification of residents’ medical records; and  
  • Numerous residents having suffered from malnutrition, dehydration, preventable pressure sores, and preventable side effects from not receiving medications as prescribed

In addition, Cathedral Rock entered into a five-year CIA with the Office of the Inspector General, which includes extensive quality of care provisions.

This case originated as a whistleblower case brought by two former employees of one of the nursing homes operated by Cathedral Rock. The whistleblowers will receive $94,000 as their share of the civil settlement. http://www.justice.gov/usao/moe/press_ releases/archived_press_releases/2010_press_releases/january/cathedral_rock.html

The alleged conduct in this case evidences a systemic failure on the part of the nursing homes to provide basic care to residents. While the patient harm alleged in this case was quite extreme, health care providers should be cognizant of staffing levels to ensure that patient care does not suffer as staff is trimmed. This case makes clear that the government takes allegations involving patient harm, especially where there is such a failure of care as to amount to no care at all, very seriously. In this case, what started as a civil whistleblower lawsuit ended with criminal charges against both the corporation and its owner.