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Litigation Testimony by Former Extendicare Management Employees

(the following details have been made public by litigation against Extendicare in Minnesota):

  • An Interim Nursing Director told Extendicare’s upper management that she was concerned about losing her nursing license due to the lack of full time nursing director and licensed administrator at the nursing home.She also reported her concerns that Extendicare could be denied Medicare payments if it had no licensed administrator at the nursing home.
  • A Nursing Director denied a prospective resident who weighed 900 pounds admission because she believed that the Extendicare facility could not care for a person of his weight. While the Nursing Director was on vacation, however, Extendicare approved the patient’s admission without the Nursing Director’s knowledge. After the Nursing Director complained to Extendicare’s upper management about the improper admission, her superior told the Nursing Director that he did not care about her staffing concerns and ridiculed her.
  • The Nursing Director learned that Extendicare’s nursing home had not obtained physician certifications and re-certifications – which were required before a health care facility could receive Medicare reimbursements.
  • The Nursing Director reported that Extendicare was discriminating in favor of Medicare patients, keeping such residents longer than medically necessary because higher reimbursements were received from Medicare than from other payor sources.
  • The Nursing Director on several occasions reported that Extendicare was holding beds open for Medicare patients while unlawfully denying beds to others.
  • The Nursing Director received a citation from the Minnesota Board of Nursing which alleged that the Extendicare facility had neglected health care during her tenure as the nursing director.
  • The Nursing Director believed that Extendicare retaliated against her for the numerous reports she had made to Extendicare’s upper management and others regarding Extendicare’s violations of the law.
  • The Nursing Director also believed that Extendicare created an unbearable work environment.
  • The Administrator of an Extendicare facilitybelieved thatExtendicare terminated her employment because she complained about, and refused to participate in, practices she believed to be illegal.
  • The Administrator believed that Extendicare discriminated in the admission and treatment of patients based on payor source.She specifically alleged that:
    • Extendicare held rooms open for higher-paying Medicare patients in violation of federal law, state law, and Medicare guidelines;
    • Extendicare held Medicare patients longer than necessary in violation of federal law, state law, and Medicare guidelines (the Administrator testified that she was directed to take measures to convince Medicare patients to extend their stays beyond any medically necessary length);
    • Extendicare moved non-Medicare patients to less desirable rooms to make desirable rooms available for Medicare patients in violation of federal law, state law, and Medicare guidelines; and
    • Extendicare cut staffing to levels that were adverse to the patients’ interests in violation of federal law, state law, and Medicare guidelines.
  • The Administrator testified that the atmosphere changed when Extendicare hired Laurie Bebo as a Vice-President for the region. According to the Administrator:
    • The Vice-President aggressively pursued an increase in the number of Medicare patients and aggressively pursued cost-cutting measures.
    • Under the Vice-President, the Administrator and other employees noticed a strong emphasis on profitability that they believed impeded the provision of good patient care.
    • The work atmosphere under the Vice-President was one of pressure to increase the number of Medicare patients by whatever means possible.
  • The Administrator described a number of specific policies designed to maximize the admission and retention of Medicare patients to the detriment of patients covered by other payor sources. These policies served as a framework that permitted and concealed payor source discrimination.
  • The Administratortestified that the Vice-President instituted a target Medicare patient quota for each facility. Administrators’ compensation was linked in part to meeting the quotas for their facilities. The Vice-President and an Extendicare director held weekly conference calls with facility administrators and nursing directors who failed to meet their quotas. The Administrator testified that Extendicare’s upper management would belittle and yell at staff who failed to meet these quotas.
  • The Vice-President directed the Administrator to keep beds available in more desirable rooms for Medicare patients, even if it meant turning away Medicaid or private source-payor patients. This policy also required the Administrator to move non-Medicare patients out of the desirable rooms and into less desirable rooms if a Medicare patient called to be admitted. The Administrator considered this practice of discriminating against patients based on payor source to be in violation of Minnesota law.
  • The Administratortestified about Extendicare’s “green light” or “green flag” admissions policy, a practice that that prohibited the rejection of Medicare admittees. The policy first changed to require a regional nurse’s approval before admission could be denied to a prospective Medicare patient, regardless of the facility’s ability to handle the patient’s needs. Later, even regional nurses and facility administrators could not approve such denials, and only Extendicare’s Vice-President could approve the rejection of a Medicare patient.
  • The state conducted an inspection that revealed safety violations at the nursing home.
  • The Administrator’s attorney accused Extendicare of improperly withholding documents that had been requested during the litigation.

The Vice-President (Laurie Bebo) has since been re-assigned to a new Extendicare company, Assisted Living Concepts, which collected $234,000,000.00 in revenue last year, according to the Des Moines Register.Bebo is the CEO of Assisted Living Concepts, which runs 216 care facilities in 20 states, seven of which are located in Iowa.One of the Iowa facilities is the Dubuque Retirement Community, which houses 116 seniors.The Des Moines Register reported on July 13, 2009 that “Iowa’s largest assisted living center has found a loophole in the law that will enable it to avoid all future government oversight and regulation even though it has been repeatedly penalized for poor quality care…. Assisted Living Concepts plans to operate the building as if it were an apartment complex subject only to landlord-tenant laws.”The newspaper identifies the conflict between the corporate motive and patient safety – the corporate strategy will allow the company to operate “without a license and all of the regulations that go with it. That means state health inspectors and the long-term-care ombudsman won’t be visiting the home and checking on the quality of care that’s being delivered.”

The Des Moines Register subsequently reported on July 29, 2009 that the “Dubuque Retirement Community …will give up its license on Sept. 14 and become an unregulated retirement home. The residents’ medical services will be provided by home health agencies, one of which is unregulated and owned by the facility’s parent company.” The article reported thatCEO Laurie Bebo visited Dubuque and answered questions about the change: “Bebo answered dozens of questions during the meeting, but some of those answers weren’t as nuanced or detailed as the state officials would have liked. Bebo said the company considers the Dubuque transition to be a pilot program that will be evaluated over the next three to six months. ‘We need to see what the repercussions are,’ she said.”