Owing $1 million in fines, bankrupt nursing home chain prepped for sale – Iowa Capital Dispatch

One of Iowa’s biggest nursing home chains, now mired in bankruptcy, allegedly owes taxpayers more than $1 million in unpaid fines due to poor quality resident care, the federal government says.

QHC Facilities, which owns eight skilled-nursing facilities and two assisted-living centers in Iowa, filed for bankruptcy in late December. The owner of the company, Nancy Voyna, died a few weeks after the company filed for bankruptcy and her son is now pursuing a sale of the company and all of its assets.

The 10 facilities have a combined capacity of almost 750 residents.

One potential hurdle to a sale is outlined in recent court filings by the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The two agencies provide QHC with a significant portion of its revenue through Medicare and Medicaid payments for resident care.

According to CMS, two of QHC’s eight skilled-nursing facilities – one in Mitchellville and one in Winterset – recently faced termination from the Medicare program, which would have shut off all of the federal funding that flows into those homes for resident care. The potential terminations were “based on quality-of-care issues and mold-related issues,” CMS says.

The CMS filings state that during one visit last year to QHC Mitchellville, state inspectors identified 10 deficiencies tied to participation in the Medicare program, and three deficiencies that posed an “immediate jeopardy to resident health and safety.”

When the inspectors returned to Mitchellville in early December, they identified five deficiencies that had “the potential for more than minimal harm to resident health and safety,” according to CMS.

A second revisit took place on Jan. 31, and state records indicate the home was again found to be out of compliance with minimum standards. However, the inspectors returned for a third return visit on Feb. 15 – three days before the deadline for the home to comply or lose Medicare and Medicaid funding – and the home was cited for zero federal violations, signaling it was back in compliance.

Court records indicate the Winterset facility was facing a March 15 deadline to come into compliance or lose its federal funding. That was based in part on deficiencies in care that inspectors reported last September. The issues involved infection control a failure to meet pain-management standards that were part of “a pattern of actual harm to the residents,” according to CMS.

In January, state inspectors returned to the Winterset home and documented at least 29 additional deficiencies – all but one of which was deemed to pose the potential for “more than minimal harm.” Two deficiencies were considered “isolated incidents of actual harm to residents.”

State records indicate that when inspectors returned to the home in February in response to complaints, all of the previously noted deficiencies had been corrected, the complaints were not verified, and the home was back in compliance with minimum standards.

Although both homes appear to have avoided termination from the Medicare program, CMS has objected to some of QHC’s plans to sell the chain, noting that nothing in the proposed process addresses how Mitchellville and Winterset’s potential termination from the Medicare program would impact the sale.

The agency also notes that QHC owes the federal government $85,000 for Medicare “advanced payments” that it collected, plus $1,176,000 for fines related to quality-of-care violations. The company might also be required to repay provider relief funds it collected to help it respond to the COVID-19 pandemic.

Prior to her death, Voyna stated in court filings that she had recently discovered that QHC had not been paying a series of quarterly fees owed to the state, leaving an accumulated debt of $4 million. That issue is not addressed in the CMS filings, and lawyers for the state haven’t raised the issue with the bankruptcy court.

The judge presiding over the bankruptcy case has ordered that any sale will be subject to court approval and that if more than two facilities are included in the sale, the purchase price of each facility must be specified. If Mitchellville or Winterset are terminated from the Medicare program before the sale closes, their Medicare-provider agreements will be excluded from the sale.

The bankruptcy court is receiving detailed reports on patient-care issues in the QHC facilities from a court-appointed ombudsman. However, all of her reports are filed with the court under seal and are not available for public inspection.

In addition, the Iowa Department of Inspections and Appeals, which oversees nursing homes, has informed the judge that it, too, may be filing reports with the court on patient-care issues, but those, too, will be filed under seal.

In recent years, QHC homes have been hit with some of the largest federal fines ever imposed against an Iowa nursing home chain, with inspectors stating the company 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.

State inspectors alleged last year that the Mitchellville home was at times staffed by only one low-level nurse aide to look after 40 or more residents.

At the time, the director of nursing allegedly told inspectors the home was “falling apart” with “bed-ridden, weakened residents with no one to help them.” A nurse aide told inspectors that “everything in the facility is a mess,” and a registered nurse reportedly described the situation for inspectors as a “free-for-all, with no leadership from management.”

QHC’s 10 Iowa facilities are QHC Mitchellville; QHC Winterset North; QHC Winterset South; QHC Madison Square; QHC Fort Dodge Villa; QHC Crestridge; QHC Crestview Acres in Marion; QHC Humboldt North; QHC Humboldt South; and QHC Villa Cottages of Fort Dodge.

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