Eight Massachusetts state legislators have asked state Attorney General Maura Healey to investigate Kindred Healthcare (NYSE: KND) as it plans to close four nursing homes and an assisted living facility in the greater Boston area, the Boston Globe reported.
The lawmakers accused Kindred of misusing state funds at the facilities it plans to close, including the improper payment of wages and benefits to the lowest-paid nursing home workers.
“The question that needs to be answered is, ‘Did Kindred lobby for and receive state funding while they were planning for the closure of nursing homes?’” Rep. Nick Collins, a South Boston Democrat, told the Boston Globe.
Collins was among those who signed the letter; a member of Collins’ office provided a copy to Skilled Nursing News. State Reps. Denise Garlick, William Galvin, and Paul McMurtry, all Democrats, and State Sens. Linda Dorcena Forry, Michael Rush, Richard Ross, and Walter Timilty. Ross was the only Republican to sign the letter; the other state senators were Democrats.
In 2016, $35.5 million was set aside by the state to boost the compensation of low-wage workers. However, part of that money went to some of the best-compensated staff members at facilities across the state, according to a report* from the Executive Office of Health and Human Services (EOHHS) that the Globe cited.
“Although the language in statute clearly states that direct care staff must have directly received this allocation to supplement their salaries, recent investigations indicate that senior executives of Kindred may have mismanaged these dollars to increase the projected worth of their facilities,” the letter from the legislators said.
In early December, Kindred said it would close nursing homes in Massachusetts, in addition to an assisted living complex. On Dec. 19, it announced a definitive agreement to have three companies, including Humana, acquire its home health and hospice division; the company is also in the process of exiting the SNF business entirely.
In an interview with the Globe, Collins suggested that state funds could also have been used to boost bonuses and salaries for Kindred executives.
The decision to close several Kindred facilities was a strategic one, and the company will take steps to assure the continuity of caregivers for affected residents, Kindred said in an emailed statement to SNN.
“Regarding funding allotted for direct care staff, we complied with the state’s regulations for 2017, and our caregivers benefitted as was intended,” Susan Moss, senior vice president of marketing and communications at Kindred Healthcare, said in the statement. “In no way were these dollars used to increase the projected worth of any facility. We will cooperate fully with the Attorney General’s office should it request information regarding this topic and the planned closings.”
Written by Maggie Flynn
Editor’s Note: After the publication of this story, a representative of the Massachusetts Senior Care Association provided Skilled Nursing News with a copy of the report mentioned in the Globe story. The report, “Nursing Facility Direct Care Add-On Report: Update,” includes information indicating that only frontline staff — including registered nurses, licensed practical nurses, certified nursing assistants, dietary aides, and housekeeping aides — were eligible for the direct care add-on revenue raises. Of the 335 nursing facilities that EOHHS was able to analyze completely, 300 were fully compliant with the rules regarding fund distribution. The report also shows that virtually all of the facilities gave the money to pay grades lower than RNs, the representative said.