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Despite Multiple Citations For Deficient Care, Government Sent More Than $400M To Troubled Nursing Home Chain

A view of Hyde Park Health Center at dusk. The mid-century building has a zig-zag roof and open cinderblock. The sign rises out of the roof.
Hyde Park Health Care Center in South Los Angeles is one of 26 nursing homes in California connected to ReNew Health.
(Chava Sanchez
/
LAist )
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At nursing homes connected to ReNew Health and Crystal Solorzano, government inspectors have documented:

In 2020, California regulators even took the extraordinary step of attempting to block Solorzano from acquiring additional nursing homes, citing a long string of troubling incidents.

None of those issues, however, stopped the flow of government money to the homes. The same government agencies that found those facilities were dirty, understaffed and provided deficient care are also their biggest source of revenue, according to an analysis of financial disclosures by LAist.

Our analysis found that nursing homes connected to the troubled chain ReNew Health and its CEO, Crystal Solorzano, received more than $428 million in Medicare and Medi-Cal payments between 2016 and 2019, the most recent years available. (Data has not yet been released for the pandemic years of 2020 and 2021.)

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Those dollar amounts represent the expected payments to nursing homes as tracked by California's Office of Statewide Health Planning. And it represents roughly three-quarters of the total healthcare revenues of the nursing homes connected to ReNew, according to the analysis of the data.

“There is really no excuse for the state and [Centers for Medicare and Medicaid Services] allowing substandard operators to continue to receive Medicare and Medicaid funds,” said Charlene Harrington, professor emeritus at UC San Francisco. She added that such owners “should be forced out of the program and hopefully new and more responsible owners can take over these facilities.”

Crystal Solorzano
ReNew CEO Crystal Solorzano has embraced the nickname "the Blonde Gorilla," which adorns a trophy and hat she has shared on social media.
(Portion(s) of images from Solorzano's Instagram account)

LAist’s investigation into ReNew found that 26 facilities connected to the company provide care to about 2,000 nursing home residents in California. In its time caring for California's most vulnerable — many of them elderly and mentally ill — the company has racked up an inordinate number of red flags and citations, many for infractions known as "Immediate Jeopardies," the most severe federal citation a nursing home can receive. More than 215 patients have died from COVID-19 at facilities connected to ReNew, according to federal data.

After LAist’s investigation published, Governor Gavin Newsom donated a $10,000 political contribution from ReNew Health Consulting Services to charity, and members of Congress said they were “appalled” and “horrified” by the details of the reporting.

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‘Lives Depend Upon It’

The flow of money from government agencies such as the Centers for Medicare and Medicaid Services to nursing homes could give regulators enormous leverage over the industry.

“Without CMS, [nursing homes] all die,” said Jerry Seelig, an industry expert who has served as a state-appointed temporary manager of troubled nursing homes. Seelig recently penned an op-ed calling for Medicare and state programs to “tie facility reimbursement to quality of care and safety”.

An audit published this week by the Inspector General at the federal Department of Health and Human Services found that “California did not ensure that nursing facilities always reported incidents of potential abuse or neglect of Medicaid beneficiaries” when patients were transferred to hospital emergency departments.

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Advocates for nursing home patients contend that enforcement is under-funded at many nursing homes. “These are big businesses, and they're making huge amounts of money," UCSF’s Harrington said. "And the government's just not spending enough on oversight."

Harrington recently wrote a paper that found that at publicly-traded nursing home chains, “revenues in 2020 continued at about the same levels" as before the pandemic. Even those whose revenues dipped may have made up the difference with grants, loans and tax-deferrals, Harrington wrote. (Another $13 billion in federal stimulus funding could make its way to skilled nursing facilities and senior care businesses in the coming months.)

Businesses connected to ReNew benefitted from $14.6 million in Paycheck Protection Program loans last year, according to LAist’s analysis of data from the Small Business Administration. PPP loans are typically forgivable, and the ReNew and Solorzano-affiliated businesses reported saving several hundred jobs.

Given the immense federal support for nursing homes, some have called for a greater federal role in licensing. States currently take the lead.

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With the growth of nursing home chains, the industry is more complex than ever before. Many chains operate across state lines, and utilize webs of LLCs and other corporate entities. Those make it difficult for families of patients and even regulators to figure out who's responsible.

Villa Mesa nursing home
A "Heroes Work Here" banner hangs over the entrance to Villa Mesa Care Center in Upland, California.
(Chava Sanchez
/
LAist )

"The growing sophistication of the nursing home industry has enabled some owners to leverage and direct assets in a manner that maximizes profits without meaningful accountability for nursing home quality," according to a March 2020 report from the Long Term Care Community Coalition.

Richard Mollot is the coalition's executive director. He believes it's time for the Centers for Medicare and Medicaid Services, the federal agency that oversees nursing homes, to step in. "There's really no federal involvement here. And there clearly needs to be," he says, "because the states aren't doing a good job of handling it."

Mollot wants the federal government to create clear standards for vetting nursing home operators, rather than leaving the states in charge. "Those rules are so important," he says. "Literally, residents' lives depend upon it."

California’s Department of Public Health, which oversees licensing in the state, has denied Solorzano's request to take over nine nursing homes, citing violations and serious deficiencies at "facilities [Solorzano] owned, managed, or operated, directly or indirectly." (A hearing on the denial of those nine licenses to Solorzano is scheduled to begin on July 19.)

"Those rules are so important. Literally, residents' lives depend upon it."
— Richard Mollot, Long Term Care Community Coalition

State regulators also deemed Solorzano unfit to be a nursing home administrator and moved to revoke her license. Records recently released to LAist show that a CDPH attorney said the license was “procured by fraud, misrepresentation, and deception” by Solorzano.

Solorzano submitted an allegedly fraudulent college transcript. The document claimed to have been from Touro College’s “School of Health Services,” which the CDPH determined does not exist.

LAist reporters previously raised the issue of the transcript in a letter to Solorzano, but it was not addressed in a response from a ReNew spokesperson. In a statement, spokesman Dan Kramer said; "Ms. Solorzano is fully qualified to own and operate nursing homes, and in fact has specialized in acquiring troubled facilities and turning them around to preserve and maintain critical bed space that would have otherwise been unavailable during the pandemic.”

His statement went on to say that "Solorzano's only focus is maintaining the health and safety of our employees and residents."

A note about the data:
  • The data factors in inpatient and outpatient Medicare and Medi-Cal payments, as well as contractual adjustments, as audited and reflected in Office of Statewide Health Planning and Development data. The analysis excluded revenues at facilities tied to ReNew prior to any documentation of ReNew or Solorzano’s involvement, and some of the 26 facilities were not analyzed in this reporting. The 2016, 2017 and 2018 data reviewed by LAist has been audited by OSHPD, while the 2019 data is what OSHPD considers "as submitted" by facilities and has not yet been audited by the agency.