Communication failure: Judge unaware state changed rules to help Bob Dean patients get claims

State officials did a solid last spring for a large majority of the 843 former patients of Bob Dean's nursing homes who suffered through a botched evacuation for Hurricane Ida and are due money under a $12 million insurance settlement.

The Louisiana Department of Health worked with federal officials to lift asset limits for Dean's former patients to keep them from losing eligibility for Medicaid when they cash settlement checks.

But word of the relief apparently never made it from the LDH to the judge and attorneys who are working to distribute the money to those former patients from a class-action settlement.

William "Rusty" Knight, a retired judge serving as special master in the case, said he first received word about it on Wednesday.

"Why in the name of goodness am I just now getting this?" he asked. "What's frustrating to me is obviously that this is something we want to know and need to know in dealing with the Dean matter, and nobody until yesterday" mentioned it.

Even so, Knight described the news as "a godsend. I'm going to tell you that I'm delighted."

Just this month, 24th Judicial District Court Judge Michael Mentz approved a plan from Knight to disburse "partial distribution checks" of $1,000 to more than 420 of Dean's residents who filed claims. Those payments were kept small in part to stay safely under Medicaid savings limits, said Knight.

Knight said he "could have been a little more generous" on those initial payments, which are going out this week to 420-plus patients who filed claims under the settlement, two years after the state shut down Dean's homes, dispersing those residents. About 150 of the 843 patients who endured the evacuation to an ill-equipped Independence warehouse have since died.

Knight said Thursday that he didn't know who started the effort to change the rules for Dean's patients, or why nobody told him.

Attorney Don Massey, who represents several plaintiffs in the case, said he also had not previously heard about the agreement to lift the asset limit. But he agreed that it was good news, saying it's the right thing to do for nursing home residents who have suffered.

"We're surprised but grateful," Massey said.

State pursued change in spring

Kevin Litten, an LDH spokesperson, said the agency acted on its own to seek an amendment to the state's Medicaid plan. While the feds were reviewing it, Litten said the Louisiana Nursing Home Association made a similar request.

Correspondence shows the LDH requested the change in late March, and that the national Centers for Medicare and Medicaid Services agreed to it June 27. The federal agency also agreed to retroactively apply the new rules starting Jan. 1 this year.

It was all news to the people cutting the checks.

The settlement that Mentz approved last year in court came in expedited fashion, though some attorneys for residents who suffered serious medical issues as a result argued that that speed came at the expense of a fulsome accounting of Dean's assets and ability to cough up any of his own wealth.

Dean's lawyers and those leading the class action against him argued that it was all tied to his shuttered and seized nursing-home empire, and that his assets were tapped. Speed was paramount given the rapidly dying class, they argued. But the process has carried on much longer than those attorneys had publicly anticipated 10 months ago, when they projected possible holiday payouts.

Warehouse led to deaths, arrests, lawsuits

Dean was off-site as his residents struggled through the hurricane evacuation and crowded into a remote warehouse in Tangipahoa Parish without enough bathrooms and spotty air conditioning. The warehouse partially flooded during the storm, and state inspectors reported seeing elderly people begging for help while staff ignored their pleas. Dean bickered with authorities in a series of raging text messages.

He refused state officials' requests to improve conditions, and they eventually intervened to rescue his residents from the warehouse, sending them to hospitals and nursing homes across the state. More than 50 were hospitalized, and several died. Five of their deaths were deemed "storm-related."

Residents began suing Dean shortly afterward. He was arrested last year on charges of cruelty to persons with infirmities, Medicaid fraud and obstruction of justice. And the U.S. Department of Justice sued him earlier this year, claiming he misspent $4 million of nursing-home assets and income that was meant to upgrade facilities like the evacuation warehouse. The feds say Dean siphoned it for luxuries.

His attorneys say Dean suffers from dementia, and he's avoided sworn testimony since the ordeal began. Dean pleaded not guilty in the criminal case and is awaiting trial.

Settlement money being divvied up

Knight said the waiver from asset limits that was approved specifically for Dean's former patients doesn't clear up the potential that some who weren't on Medicaid still could face "clawback problems" with their insurers.

"But it darned sure helps," he said of the rule change. "It eliminates some pressure I have about putting too much money in people's hands."

He also pointed to other, positive recent steps in getting money to Dean's former patients.

Knight said he's received $1.4 million in additional funds that Dean kept for his residents in individual patient trust accounts. He said work remains to determine who is owed what from that sum. He's encouraging residents or their relatives to provide any records showing their balances in those accounts.

He also said that a legal fight with one of Dean's insurance companies over an additional $2 million has gone to mediation.

As it stands, the pot of settlement money hovers around $12 million, with about $8.5 million allotted for patients after attorneys' fees and other costs. Mentz agreed to disburse 30% of the more than $2 million he approved for the plaintiffs' attorneys.

Knight said his primary goal is to prevent the funds slated for Dean's former residents from being returned to the state or diverted to charity.