Abuse and Neglect of Elderly Rampant In Nursing Home Industry

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The indictment further alleged that Zelmanowicz submitted false claims for payment, which showed Medicaid patients were receiving ventilator treatment when the patients were not. Medicaid pays significantly more for patients who receive ventilator care.

The complaint charges that Zelmanowicz took an $800,000 annual salary from the nursing homes, and ignored the repeated warnings of his accountants to end his wrongful billing practices and repay the Medicaid program and that Zelmanowicz was warned by his staff that he was violating Medicaid rules but that he nonetheless instructed the staff to continue submitting the fraudulent claims.

In addition to criminal charges, the Attorney General filed a civil lawsuit against Zelmanowicz and his partner, Rebecca Rich, as the former owners of two homes, which they sold in September 2002.

The civil suit seeks asset forfeiture from Zelmanowicz and Rich and repayment by Zelmanowicz of three times the amount he fraudulently billed. Altogether, the civil complaint seeks more than $12 million.

Attorney General Spitzer says that this case illustrates how Medicaid fraud is not only a matter of phantom patients and fly-by-night operations. "In this case," he said in the press release, "two substantial facilities, in business for many years, with real patients, were used as a means to extract money from Medicaid by hiding crooked billings among the mass of real services."

According to the Attorney General's office, New York's Medicaid program pays $11 billion a year for nursing home care. The federal government pays for half, with state and local governments picking up the rest of the tab.

Mr Spitzer's dogged investigations have paid off well for New Yorkers. In 2005, his office recovered $274 million in Medicaid fraud, compared to $63 million in 2004.

In recent years, the nursing home industry has lobbied hard to make it difficult for private individuals to sue nursing homes. Some states have already passed laws to limit damage awards. "Generally," Consumer Reports says, "that means legally imposed caps, typically $750,000 on punitive damages and $250,000 on noneconomic damages for pain and suffering."

Nursing homes claim they need caps to predict operating costs, particularly for liability-insurance premiums. However, according to Consumer, "caps make it more difficult for victims to find a lawyer willing to take the financial gamble of representing them."

Critics say litigation is the only method available to make the large nursing home conglomerates clean up their act. "Litigation can hold corporations accountable for poor care," according to Attorney Kennard Bennett. "Over time," he says, "the goal of this type of litigation is to make it cost more to provide bad care than to provide good care."

Virginia Attorney, John Harris III, also says "the way to clean up nursing homes is to make it more expensive to neglect the residents than it is to take proper care of them."

Cases involving gross abuse and neglect that do make it to a jury are seeing large awards. The May 18, 2006, Associated Press reported a case where a North Idaho jury awarded $18 million for the death of an elderly man where the nursing home staff committed "more than 700 violations of federal nursing home regulations."

The staff eventually caused the man's death with repeated dosages of Haldol, a powerful anti-psychotic drug they used to control him after he tried to leave the home, said Richard Eymann, the attorney for the man's son.

"This jury verdict sends a message to the entire nation," Mr Eymann told the Associated Press. "Nursing home abuse, including the use of sedating or mind-altering drugs to profit off senior citizens, will not be tolerated. It is our hope that the verdict will help change the culture in nursing home care."

The large for-profit chains are erecting other barriers to shield themselves from lawsuits. For instance, some facilities now require families to sign binding-arbitration agreements before a family member can be admitted.

Some chains have come up with ways to restructure their businesses to insulate them from liability. Consumer's Report explains how it works:

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