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Probe: Medicaid funds still go to suspect senior care homes

In this March 10, 2019 photo, one of six care homes that until recently was operated by Adat Shalom Board and Care is tucked on a residential street in Los Angeles' West Hills neighborhood. California labor regulators cited Adat Shalom and its owner for more than $7 million for unpaid wages and penalties involving 149 workers. The company's appeal is pending. An investigation has found that Medicaid funding has continued to flow to senior care-home operators in four states cited for stealing workers' wages or breaking other labor laws. Reveal from The Center for Investigative Reporting found earlier this fall that Medicaid funding went to at least 45 care homes previously cited for labor violations in California, Florida, Oregon and Wisconsin. The bulk of those cases occurred in California. (Rachel de Leon/Reveal via AP)

By JENNIFER GOLLAN

The Center for

Investigative Reporting

Medicaid funding has continued to flow to dozens of senior care-home operators in four states cited for stealing workers’ wages or breaking other labor laws, an investigation by Reveal from The Center for Investigative Reporting has found.

Earlier this fall, Medicaid funding went to at least 45 care homes previously cited for labor violations in California, Florida, Oregon and Wisconsin. The bulk of those cases occurred in California, where at least 35 facilities continued to receive Medicaid reimbursements in October after being penalized by state or federal labor regulators. That number dropped to 18 facilities as of Nov. 21, when the state released the most recent data. Medicaid reimbursements can fluctuate month to month, depending on the number of Medicaid-eligible residents in a facility at any one time.

Government spending under the public health insurance program still was going to Agape Cottages, a chain of care homes in Southern California owned by Joseph Alvarez, who pleaded guilty last year to a criminal misdemeanor after he directed 17 workers to return $196,000 in back wages he had agreed to pay them and then lied to federal regulators to cover it up.

Also still receiving or eligible for Medicaid reimbursements were care homes in the West Hills neighborhood of Los Angeles that until recently operated under the name Adat Shalom. In 2017, state labor regulators cited Adat Shalom and its owner, Angelica Reingold, for more than $7 million for unpaid wages and penalties involving 149 workers in one of the nation’s largest cases of wage theft in the residential care industry. An appeal by the company is pending.

Neither Reingold nor Alvarez returned calls seeking comment.

The federal government and states share the cost of Medicaid to cover personal care services for low-income people, including seniors in assisted living facilities. States spent more than $10 billion in state and federal Medicaid funds on assisted living services for more than 330,000 people in 2014, or an average of about $30,000 per person, according to a 2018 Government Accountability Office report. Caregivers at these facilities provide vital services for the elderly, including changing adult diapers, preventing bedsores, and dressing and bathing residents.

Companies may be prohibited from collecting Medicaid if they have been convicted of Medicare or Medicaid fraud or patient abuse or neglect, among other offenses. However, the federal agency that administers Medicaid – the Centers for Medicare & Medicaid Services – does not police whether senior care-home operators comply with wage and hour laws.

“It’s appalling, but sadly a further sign of inadequacy of federal alongside state protections of vulnerable people who depend on Medicaid,” said Judy Feder, a public policy professor at Georgetown University’s McCourt School of Public Policy.