Feds slash penalty for Perry nursing home; state admits error in its fines

Federal officials have agreed to dramatically reduce the fines imposed against the Dallas County nursing home accused of hiring unlicensed caregivers and contributing to a resident’s death.

State inspectors, meanwhile, have acknowledged that last fall they mistakenly fined the home too little, and are now meeting with bank officials to monitor the financial health of the facility.

In October, the Iowa Department of Inspections and Appeals cited the Rowley Memorial Masonic Home in Perry for numerous quality-of-care issues and imposed a largely symbolic fine of $7,250 against the owners. The agency held the fine in suspension, which means it was not imposed while federal regulators considered what sort of penalty they might impose.

Some of the violations uncovered in October were serious, repeat offenses. In such cases, DIA typically points that out in its public inspection reports and triples the state fine, but that didn’t happen in this instance.

On Tuesday, the Iowa Capital Dispatch asked DIA why the fine hadn’t been tripled. On Friday, DIA spokesperson Stefanie Bond said there had been “a clerical oversight,” and the citation against the home was being amended and re-issued to reflect the correct penalty of $21,750 — although the fine remains held in suspension.

Bond said federal officials opted to impose a fine of $181,785 against the home as a result of the October inspection. The facility then asked for, and received, a 35% discount, and also pleaded financial hardship. That resulted in the federal fine being slashed to $100,435. The facility has been given one year to pay that fine, plus $6,000 in interest, Bond said.

The Iowa Capital Dispatch reported Tuesday that internal auditing reports of the home’s owner, the Herman L. Rowley Memorial Trust, show the organization began losing money in 2017 and embarked on a cost-cutting plan that entailed “adjusting staffing ratios to be as cost effective as possible while maintaining quality care.”

The number of quality-of-care violations cited by state regulators subsequently tripled, and over the next two years, the home was repeatedly written up for insufficient staff, the use of unlicensed caregivers, drug overdoses, infection-control issues, untrained workers, the sexual abuse of a resident and other violations.

Earlier this week, the Iowa Capital Dispatch asked DIA what steps it had taken to ensure the home’s financial situation wasn’t continuing to put residents at risk.

In response, Bond said agency employees have had “face-to-face meetings” with the bank representatives and federal officials at the Centers for Medicare and Medicaid Services regarding the home’s financial stability.

“The department routinely reviews financial reports submitted to our office by the facility,” she said. “We continue to conduct unannounced monitoring visits, including nights and weekends.”

As recently as Jan. 9, a worker at the home told DIA the home’s dementia unit was staffed two or three times per week by only one employee during the evening shift.

According to Rowley’s financial audits, one of the trust’s main problems is the accumulation of long-term debt. The 2018 audit shows that in recent years the annual payments on the principal that is owed by the trust has been in the neighborhood $300,000. Next year, those payments are expected to balloon to $4.6 million, according to the audit. It’s not known whether the trust has restructured its debt since the 2018 audit was prepared.

Financial troubles at the home at the home have been so serious that in May of last year the facility was unable to buy bottled oxygen for the elderly residents who needed it simply to breathe, according to state records. The inspectors then discovered there were 31 vendors – including suppliers of medical equipment – that were owed almost $600,000, and the facility was also $600,000 behind on its mortgage.

The suspended $30,000 state fine is tied to violations uncovered during inspections in December and January. At that time, the home was written up for failing to have a functioning alarm system to prevent residents from wandering away, and failing to protect residents from injury due to falls.

In a written statement, the home’s new administrator, Greg Greenwood, said earlier this week that issues cited by state inspectors “are complex and being seriously addressed. However, such matters take time to remedy.”

The home is now on CMS’ Special Focus Facilities list, which identifies homes that have an established pattern of numerous, serious violations related to resident care. The home is currently operating on a conditional license from the state.

State records indicate the facility is home to roughly 40 older Iowans. It is part of the sprawling Rowley Masonic Community complex in Perry, which includes assisted living units and independent living apartments. The facility is run by Health Dimensions Group, a Minnesota company that manages nursing homes in Iowa, Colorado, Wisconsin, Illinois and other states.