Nursing home regulator worked for the industry before and after his state gig

By: - January 12, 2023 4:50 pm

One of Iowa’s top nursing home regulators worked for the industry before and immediately after he was tasked with overseeing such facilities. (Photo by Iowa Department of Inspections and Appeals)

One of Iowa’s top nursing home regulators spent 10 years working for the industry before the state hired him to oversee such facilities, and then returned to the industry immediately after leaving state employment.

From 2009 through 2019, Todd Frank worked as both an Iowa nursing home administrator and industry consultant. In November 2020, he began working for the Iowa Department of Inspections and Appeals as the deputy administrator of the agency’s Health Facilities Division, the office that’s responsible for inspecting, overseeing and regulating all Iowa nursing homes.

In September 2021, he left his job at DIA and joined Beacon Heath Management, a Florida company that owns and manages 10 Iowa nursing homes. In recent years, some of Beacon’s Iowa facilities have been cited for dozens of regulatory violations by DIA, fined more than $100,000, and placed on a federal list of the nation’s worst nursing homes.

The Iowa Department of Inspections and Appeals said Thursday it has no reason to believe Frank violated Iowa’s so-called “revolving-door law,” which is intended to discourage the migration of state regulators into industries they oversaw in their state job.

That law prohibits state employees who leave their job to collect compensation, within two years of their departure, from any company “in relation to any case, proceeding, or application with respect to which the person was directly concerned and personally participated” while working for the state.

State records show that DIA’s Health Facilities Division was overseeing, inspecting and imposing fines against Beacon’s Iowa care facilities in 2021, while Frank helped lead the division and while he was negotiating the terms of an employment contract with Beacon. Some of the division’s enforcement actions continued into 2022, by which time Frank was on Beacon’s payroll.

It’s not clear how personally involved Frank was in any DIA enforcement actions involving Beacon.

Although the revolving-door law isn’t limited to restrictions on lobbyists, Frank’s attorney, Grant M. Rodgers, said his client wasn’t required to engage in lobbying on behalf of Beacon. “He was mindful from day one of his obligations as a former DIA administrator and took caution to make sure he was not involved in efforts that would implicate the state’s ‘revolving door’ prohibitions,” Rodgers said.

DIA spokeswoman Stefanie Bond said while the department is still “unsure of the specific company” that hired Frank away in 2021, it knew at the time that Frank was leaving to work somewhere in the nursing home industry. Bond said DIA knows that Frank and his supervisor “took appropriate action” at that time to avoid any conflicts of interest, but she did not elaborate.

“The department is unaware of any former employee working on any matters in relation to any case, proceeding, or application that they were directly concerned and personally participated in during state employment,” Bond said, adding that DIA “maintains high ethical standards” and has “robust policies” regarding conflicts of interest.

Dean Lerner, who served as the director of DIA under Democratic Gov. Chet Culver, said the state now seems more interested in protecting the industries that it regulates than in protecting Iowa families.

“This is another example of Republican appointees thwarting oversight of regulated industries (and) setting aside the interests of Iowans from the protection of regulations meant to ensure their health, safety and welfare,” Lerner said.

Job-change timeline detailed in court records 

Frank’s employment as both a state regulator and an industry official is outlined in a lawsuit he recently filed in Dallas County District Court. In that lawsuit, Frank claims he was wrongly denied severance pay after Beacon fired him last summer.

According to the lawsuit, Krista Sikes, Beacon’s vice president of human resources, emailed Frank on April 26, 2021, while he was working at DIA as the agency’s deputy administrator of the Health Facilities Division. Sikes informed Frank that Beacon was recruiting him for a job as senior vice president of Iowa operations.

At the time, Beacon didn’t have any Iowa holdings, but was in the process of purchasing the 10-facility Pearl Valley chain of Iowa nursing homes. Within days of Sikes’ email, Beacon acquired the chain for $24.2 million, or $42,606 per bed. At the time, the entity that brokered the deal said the homes were generating $35 million in annual revenue, with cash profits totaling $3.5 million per year.

Sikes’ email, the lawsuit claims, initiated “a months-long period” in which Beacon actively recruited Frank to head its Iowa operations. During those same months, DIA’s Health Facilities Division cited five of the 10 Pearl Valley/Beacon nursing homes for a total of 41 violations, resulting in $7,000 in state fines.

In his lawsuit, Frank alleges he was “attracted to the compensation offered by Beacon but had concerns about leaving his stable job with the Iowa Department of Inspections and Appeals.”

In August 2021, the lawsuit claims, Frank sent an email to Beacon’s chief operating officer, Bruce Wertheim, stating that he would accept the job offer if Beacon guaranteed him 13 weeks of severance pay if Beacon ended his employment for any reason other than code-of-conduct violations.

Beacon allegedly agreed and sent Frank a formal job offer. Frank accepted the offer on, or shortly before, Aug. 30, 2021, and one month later, he left DIA’s employment. He began working for Beacon one week later, on Oct. 6, at an annual salary of $150,000. Frank had been earning $88,733 per year at DIA, according to state records.

As part of his new job, Frank was eligible to collect an additional $30,000 in incentive payments tied in part to something called “regulatory budget expectations.” The portion of the contract that defines that term is not included in court records.

Over the next 10 months, Frank alleges, he was never given an oral reprimand or written warning of any kind. Despite that, Beacon executive James Mason allegedly told Frank in July 2022 that his employment with Beacon was being terminated due to an ongoing decline in the number of residents in the Iowa care facilities he was overseeing. The company allegedly refused to give Frank his severance pay and refused to compensate him for his accrued time off.

The lawsuit seeks compensation for all of the unpaid money allegedly owed by Beacon to Frank. The company has yet to file a response and did not respond to calls from the Iowa Capital Dispatch.

According to Frank’s online resume, he worked as a nursing home administrator for at least four Iowa care facilities — Des Moines’ Ramsey Village, the Carlisle Center for Wellness and Rehab, the Grinnell Health Care Center and the Cedar Falls Health Care Center — before DIA hired him to help oversee those and other Iowa care facilities.

Frank also worked as a regional director of operations for Trillium Healthcare Consulting before joining DIA.

Each of Beacon’s Iowa care facilities operate under the name “Aspire,” and they’re located in Perry, Gowrie, Washington, Donnellson, Muscatine, Sutherland, Estherville, Primghar, Lake Park and Pleasant Valley.

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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.