Amid wrongful-death claims and unpaid fines, Iowa nursing home chain files for bankruptcy

By: - January 5, 2022 11:57 am

(Photo by krisanapong detraphiphat/Getty Images)

An Iowa nursing home chain repeatedly accused of providing substandard care for hundreds of seniors has filed for bankruptcy protection.

QHC Facilities, based in Clive, operates eight skilled nursing facilities in Tama, Madison, Humboldt, Jackson, Linn, Webster and Polk counties, as well as two assisted living centers. Collectively, the facilities have a maximum capacity of more than 700 residents. The company employs roughly 300 full-time and part-time workers.

The company filed for bankruptcy last week, claiming $1 million in assets and $26.3 million in liabilities.

In recent years, QHC and its affiliates have been hit with some of the largest federal fines ever imposed against an Iowa nursing home chain, with inspectors stating the company had placed residents in immediate jeopardy due to substandard care. At the same time, however, the company has sued its elderly residents for failure to pay for that care, and has neglected to pay more than $700,000 in fines.

In court filings this past week, QHC asserted that since March 2020 it has faced “significant fiscal challenges” due to the COVID-19 pandemic, as the company’s nursing homes “grappled with caring for their residents and maintaining sufficient operational liquidity amidst constantly changing conditions.”

The company also told the court it has been dealing with “crippling staffing and employee retention issues, and increased operating expenses associated with personal protective equipment, labor pressures, and other associated costs.” QHC says it has received “some relief” from federal assistance programs, but “has received only very limited state relief.”

According to QHC, the financial problems were allegedly compounded by the death of former CEO Jerry Voyna seven months ago, which had “a devastating impact” on the business. Voyna was succeeded as CEO by his widow, Nancy, who stated in court filings this week that the company was “highly reliant on (Jerry’s) operational and financial management.” However, she also stated that after her husband’s death it was discovered the company had not been paying a series of quarterly fees owed to the state, leaving an accumulated debt of $4 million.

QHC says it is now “seeking an expedited sale of operations under which patient care will continue uninterrupted and employee and vendor relationships will continue.”

The company received permission from the court this week to continue spending money on employee wages and other operational expenses in order to keep the homes open. Payment of those obligations, the company said in court filings, is “crucial for maintaining employee confidence and morale and will encourage employees to remain in the employ of the debtor at this critical time.”

Federal fines unpaid and past due   

QHC has faced numerous significant federal fines in recent years — some of which appear to remain unpaid — due to ongoing quality-of-care issues.

Last year, federal officials fined the QHC’s Fort Dodge Villa more than $685,000 – one of the biggest fines ever levied against an Iowa care facility — after a state inspection uncovered numerous, serious deficiencies in resident care.

As of December, the home was still not in compliance with minimum standards, and so the fines against the facility were continuing to accrue at the rate of $330 per day.

All told, QHC allegedly owes $703,377 in past-due federal fines tied to violations at its care facilities, according to state data. Combined with the daily fines at Fort Dodge, the company could wind up owing taxpayers $1.4 million in federal fines.

Last month, the Iowa Capital Dispatch asked QHC about the unpaid fines. After 11 days, the company said it was “still researching” the status of six fines that total $536,835. The company said it was working toward payment of two fines totaling more than $100,000 and said that it had paid in full one fine of $39,858.

One QHC facility, the Mitchell Village Care Center, also known as QHC Mitchellville, has at times been staffed by only one low-level nurse aide to look after 40 or more residents, according to state reports.

The director of nursing allegedly told state inspectors last year that the home was “falling apart” with “bed-ridden, weakened residents with no one to help them.” The inspectors watched as staffers made their rounds and failed to sanitize equipment or don the protective gowns intended to limit the transmission of COVID-19.

A nurse aide told inspectors she was never told where to locate personal protective equipment or how to use it, and said “everything in the facility is a mess.” A registered nurse described the situation for inspectors as a “free-for-all, with no leadership from management.”

In the past two years, the federal Centers for Medicare and Medicaid Services has imposed federal fines of more than $105,000 against Mitchell Village, but according to the state data, those are among the fines that remain unpaid.

QHC sued its residents for payment

One former resident of QHC’s Mitchell Village home is Frances Solinger, who  died at the home in 2015, allegedly as the result of negligence. Her family sued QHC, and before the case was settled out of court, Frances’ daughter, Jennifer Sanford of Reynolds, gave a deposition in which she said she and her siblings visited their mother at the home and repeatedly found her sitting on the toilet waiting for someone to help her up, or lying in a bed soaked in urine and feces.

“We trusted them,” Sanford testified. “The bathroom issue always upsets me because …  I would go to visit and she’d be in the bathroom sitting on that stool. It’s almost like they forgot about her and she couldn’t do anything about it because she couldn’t get up on her own … Also, there was times I would be up there and mom would have gone to the bathroom (in her bed), and I’d press the call light. Again, I truly gave them plenty of time — how I felt would be ample time to come into that room to help. I would start grabbing the gloves on my own to clean her up … When they promise you that they’re going to take care of your mom, you want to believe them … That’s all you do. You hope that they do what they tell you they’re going to do.”

Despite a near-constant stream of regulatory violations alleging substandard care, QHC has been taking its elderly residents to court to force payment for that same care.

Since 2018, QHC has sued more than a dozen of its own residents, even as government regulators said the company has placed those residents in harm’s way.

Among the Iowans sued by QHC: Arnold Gibson for $9,500; Dona Ballantine for $5,300; Charlene Seehusen for $13,000; Georgia Gumm for $8,300; Milo Lammers for $14,300; Donna Day for $1,800; Merlene Rynearson for $22,000; Scott Neil for $3,600; Jonathan Riley for $39,000; Marcella Davis for $27,000; Sue Paul for $11,000, and Frederic Davis for $3,000.

In April of last year, QHC sued a resident of the Fort Dodge home, Danny Richardson, for nonpayment of $36,343 in billings. Richardson died with the case still pending, so QHC pursued his widow, Eileen, for payment before settling the case out of court.

More recently, QHC has been the target of lawsuits filed by other companies that play a direct role in delivering care at QHC facilities.

In April of last year, a staffing company that provided QHC with workers sued for nonpayment of $113,000. A trial is scheduled for next November. In October, a company that provided rehabilitation services for QHC sued for nonpayment of $945,000. A trial-setting conference in that case is scheduled for this month.

QHC is also facing wrongful death claims, including a case filed by the family of Gladys Van Sickle, who died after allegedly sustaining broken bones in a fall at Winterset North. A trial in that case is scheduled for October 2023.

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Clark Kauffman
Clark Kauffman

Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.

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