Nursing home deaths: Owner’s hospital was paid $48 million for state prisoner health

Sept. 26--The owner of a Florida nursing home where 11 residents died after Hurricane Irma has benefited for years from tens of millions of dollars in government contracts, despite repeatedly running afoul of state and federal regulators.

Dr. Jack Michel, owner of Rehabilitation Center at Hollywood Hills, owns a Miami hospital that has received $48 million in taxpayer money to treat state prisoners since 2006.

The payments to Larkin Community Hospital started the same year Michel settled a federal fraud lawsuit that accused him of bilking taxpayers. They continued after the state barred one of his assisted living homes from taking new patients.

And there is no indication the payments will stop now, despite Gov. Rick Scott's comments that the owner is unfit to care for patients after deaths at his nursing home.

Larkin provides the prison hospital care under no-bid agreements approved by the Florida Department of Corrections, according to agency contract and finance records. The hospital has served as a subcontractor to the state's prison health care vendors, with approval from corrections officials, records show.

Eight elderly patients died Sept. 13 after Irma knocked out power at Michel's nursing home and residents remained for several days without air conditioning. Three other patients died days later after being hospitalized with complications.

Scott issued a scathing statement Monday night, again criticizing the facility's owners and staff for failing to call 911 to help patients suffering from extreme heat. The governor has been responding to claims that he and other state officials didn't respond to messages left by nursing home administrators asking for help after Irma knocked out power.

"Any health care professional that thinks calling an elected official's cell phone instead of 911 when people are in need should not be allowed to have any access to patients," Scott noted in his statement.

"Thus far, the owners and operators of this facility have offered no explanation or defense for the deaths of these patients in their care, other than to say they left messages on my personal cell phone," Scott said. "It's a ridiculous and irrational suggestion that my personal cell phone is somehow a substitute for 911."

Scott's office referred questions to the corrections agency, which the governor oversees, about whether Michel's hospital should be allowed access to state prisoners and should receive taxpayer money for their care.

"The governor trusts the Florida Department of Corrections to make decisions in the best interest of the inmates in their custody," Scott spokesman McKinley Lewis said.

Lewis noted there are limited options to provide hospital care to inmates.

"There are only two hospitals in Florida that currently treat inmates in a secure setting -- this facility and another in Jacksonville. Because of the tragic, inexplicable and inexcusable loss of 11 lives at Rehabilitation Center at Hollywood Hills, a separate facility in Broward County, the state is looking at every avenue to hold the owner of these facilities accountable," he said.

Larkin defended the care it provides Florida inmates in a statement Tuesday from Julie W. Allison, a hospital lawyer.

"All patients receive the same level of care regardless of the patient's status. It is the focus of all efforts to provide the best care possible under every circumstance," Allison said. "In regard to contracts between Larkin Community Hospital and correction providers, such care is provided in accordance with this focus, and in compliance with the state and federal contracts."

Efforts since Friday to reach Michel for comment failed.

Larkin is paid as a subcontractor by Centurion Managed Care, the private company that took over prison health care in South Florida this year, corrections spokeswoman Michelle Glady said Tuesday. She said the state would "immediately take action with a provider if inmates in their care and custody were not being provided adequate care."

But she said the state has not received complaints about Larkin.

"Centurion has not raised any concerns regarding the medical treatment provided by the hospital," Glady said.

Scott's administration, however, approved Larkin's role as a prison health care provider, starting in 2013 with a signed agreement authorizing the hospital to handle inmate medical information as it provides treatment in a secure area and again two months before Irma hit when corrections officials renewed the agreement.

Centurion CEO Steven H. Wheeler said his company, which signed a $615.7 million deal with Florida to provide prison medical services, will review its relationship with Larkin.

"Centurion constantly reevaluates all subcontractor agreements to ensure we are providing quality medical care to the inmate populations we serve," Wheeler said in a statement. "And in light of this heartbreaking situation, we have already begun the process of carefully reviewing Centurion's contract with Larkin Community Hospital, as well as the medical care they have provided at their locked unit, and will determine the appropriate course of action based on our findings, including whether to dissolve the contract."

In addition to the $48 million received caring for state prisoners, Larkin has received more than $46.6 million to care for federal inmates since 2002, according to federal contracts and payment data.

The state and federal agreements with Michel's hospital came despite accusations that he and others defrauded Medicare and ran elderly patients through Larkin for unnecessary medical treatments to steal millions in taxpayer dollars. Prosecutors at the time accused Michel and others at Larkin of using "an astonishing array of kickbacks and interconnected senior living facilities to bring elderly patients who frequently had little or nothing wrong with them."

Michel and other defendants settled the federal civil case in 2006 for $15.4 million.

Scott's administration renewed Larkin's prison health agreement in July despite the fact that the state seven months earlier had blocked a second home for the elderly he owns from receiving new patients because of concerns about their care.

The Florida Agency for Health Care Administration lifted its moratorium on patient admissions at Michel's Floridian Gardens Assisted Living Facility in Miami nearly three weeks before elderly residents died at his Hollywood nursing home.

The state Office of Insurance Regulation blocked Michel in 2005 from setting up a health plan for low-income residents in south Florida, citing the federal fraud case. Michel has argued he settled the civil case in 2006 to dispose of it without admitting guilt.

The hospital has been cited in other cases. In 2008 a federal jury convicted one of its doctors of Medicare fraud; another Larkin doctor was convicted of Medicare fraud in 2014; a Larkin administrator was indicted last year in a $1 billion Medicare fraud case, labeled the largest in U.S. history.

Centurion has paid Larkin $637,000 since June, according to payment totals provided by corrections officials.

Centurion replaced Wexford Health Sources as Florida's prison health care provider. Wexford paid subcontractor Larkin $22.6 million since 2013, according to payment totals provided by corrections officials.

Corrections officials paid Larkin $24.8 million from 2006 to 2013, according to totals provided Tuesday.

A state corrections health services report identified Larkin as one of two Florida hospitals equipped to accept prison inmates. The hospital maintains a locked corridor with a checkpoint monitored by guards in a control room.

Federal inmates are kept in a separate corridor with several armed guards, according to a 2016 report provided to Larkin employees. At times, the federal inmates are shackled to the bed, the report states.

Scott has argued his administration has taken aggressive steps to respond to the deaths at the Hollywood nursing home, including suspending the facility's license, blocking patient admissions and stopping Medicaid payments.

"There were over 100 nursing homes that reportedly lost power during Hurricane Irma, but this is the only facility that allowed patients to die," Scott said in his Monday night statement. "I fully expect that those responsible for these senseless deaths will be brought to justice, and a criminal investigation is well underway."

Lawyers for the nursing home filed a lawsuit last week challenging the state actions, arguing staff acted properly under a safety plan approved by Broward County officials.

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