How N.Y.’s Biggest For-Profit Nursing Home Group Flourishes Despite a Record of Patient Harm

Charlie Stewart was looking forward to getting out of the nursing home in time for his 60th birthday. On his planned release day, in late 2012, the Long Island facility instead called Stewart’s wife to say he was being sent to the hospital with a fever.

When his wife, Jeanne, met him there, the stench of rotting flesh made it difficult to sit near her husband. The small wounds on his right foot that had been healing when Stewart entered the nursing home now blackened his entire shin.

“When I saw it at the hospital … I almost threw up,” Jeanne Stewart said. “It was disgusting. I said, ‘It looks like somebody took a match to it.’ ”

Doctors told Stewart the infection in his leg was poisoning his body. To save his life, they would have to amputate above the knee.

Stewart had spent about six weeks recovering from a diabetic emergency at Avalon Gardens Rehabilitation & Health Care Center on Long Island. The nursing home is one of several in a group of for-profit homes affiliated with SentosaCare, LLC, that have a record of repeat fines, violations and complaints for deficient care in recent years.

Despite that record, SentosaCare founder Benjamin Landa, partner Bent Philipson and family members have been able to expand their nursing home ownerships in New York, easily clearing regulatory reviews meant to be a check on repeat offenders. SentosaCare is now the state’s largest nursing home network, with at least 25 facilities and nearly 5,400 beds.

That unhindered expansion highlights the continued weakness of nursing home oversight in New York, an investigation by ProPublica found, and exposes gaps in the state’s system for vetting parties who apply to buy shares in homes.

State law requires a “character-and-competence” review of buyers before a change in ownership can go through. To pass muster, other health care facilities associated with the buyers must have a record of high-quality care.

The decision maker in these deals is the state’s Public Health and Health Planning Council, a body of appointed officials, many from inside the health care industry. The council has substantial leverage to press nursing home applicants to improve quality, but an examination of dozens of transactions in recent years show that power is seldom used.

Moreover, records show that the council hasn’t always had complete information about all the violations and fines at nursing homes owned by or affiliated with applicants it reviewed. That’s because the Department of Health, which prepares character-and-competence recommendations for the council, doesn’t report them all.

The department’s assessments of Landa and other owners of SentosaCare homes have routinely found that the facilities provided a “substantially consistent high level of care” – the standard owners must meet to receive council approval.

Yet the agency’s assessments in 15 separate ownership applications since 2013 did not mention at least 20 federal fines paid by the group’s homes, records show. In more than a dozen cases, the department reported “no repeat violations,” even when a SentosaCare home had been cited multiple times for the same serious deficiency.

Many of the nursing home deals ProPublica reviewed received a go-ahead despite rules saying they “shall not be” approved when facilities have repeat violations that put residents at risk. Under a narrow interpretation of the rules, however, the department still recommends approval if violations aren’t strictly identical or were promptly addressed.

SentosaCare’s owners or associates weren’t the only applicants to get incomplete vetting, but the council has had repeated opportunities to scrutinize their records. Landa, Philipson or relatives bought shares in a dozen homes in 2013 and 2014, records show.

Advocates for nursing home patients say that instead of a backstop, New York’s approval process has become a rubber stamp.

“The law establishes mechanisms for at least a moderate review of an applicant’s character and competence,” said Richard Mollot, director of the Long Term Care Community Coalition in New York. “The failure to provide complete information on a provider’s past performance fundamentally undermines the review process.”

Mollot’s group published a recent report saying the Health Department has one of the nation’s lowest rates of citing nursing home operators for deficiencies in care. New York is also among a minority of states that don’t mandate minimum staffing ratios, even though research shows a strong link between nursing staff and residents’ well-being.

Thirteen of SentosaCare’s homes (though not Avalon Gardens) have Medicare’s bottom score for nurse staffing. Inspection reports also show that at least seven residents have wandered away from the SentosaCare affiliated facilities in recent years — including one who froze to death in 2011. Inspectors and prosecutors have found that staff falsified records in some cases. Dozens of patients at SentosaCare homes have experienced long delays before receiving necessary care; some ended up in hospitals.

The Stewarts said the staff at Avalon Gardens showed “no sense of urgency” when they complained about missed meals, soiled sheets and unanswered call bells. Even though nurses dressed the wound on Charlie’s leg daily, and a doctor checked it each week, no one warned them about its worsening condition, the Stewarts said.

Dr. Kris Alman, a retired endocrinologist who reviewed Stewart’s medical records and photographs at ProPublica’s request, said that the two quarter-sized lesions on his foot when he was admitted to Avalon Gardens could not have “become what it did overnight.” That the condition “progressed as far as it did, with him coming in septic and needing an above-the-knee amputation, was inexcusable,” Alman said.

Landa’s attorney and business partner, Howard Fensterman, declined to comment on Stewart’s case for reasons of patient privacy. Fensterman defended Avalon Gardens and other SentosaCare facilities, however, saying that when inspectors have found problems, the homes quickly addressed them and secured state approval of correction plans.

Fensterman also said that SentosaCare does not have “ownership or control” over the facilities in its network and only contracts with them to provide administrative and rehabilitation consulting, regulatory advice and purchasing services. Records show, however, that Landa and Philipson, or family members, have ownership stakes or directorships in nearly all of SentosaCare’s facilities. Fensterman also co-owns 14 nursing homes with Landa in several states, including one SentosaCare home.

Fensterman is a former member of the state health council, as is Landa, who entered the nursing home business in the late 1980s and emerged as one of the sector’s biggest players over the next decade. Landa, Philipson or family members now hold stakes in at least 33 nursing homes in New York and an equal number in nine other states.

In 2013, the latest year for which state data is available, homes under the SentosaCare umbrella paid the company more than $11.5 million for financial, staffing and other services, and spent nearly $630,000 with Fensterman’s law firm.

The nation’s $137 billion nursing home industry has made major improvements since the landmark 1987 federal Nursing Home Reform Act imposed mandates to combat abuse and neglect. But the industry, which draws heavily on taxpayer funding via Medicare and Medicaid, still struggles to provide safe care for many.

One-third of Medicare patients suffered preventable harm within a month of being admitted to nursing homes for short-term rehabilitation, according to a 2014 study by the Department of Health and Human Services’ inspector general. The harm cost Medicare $2.8 billion for hospitalizations alone in 2011, the study estimated.

New York spends about $13 billion each year on the state’s 627 nursing homes, which collectively care for more than 100,000 residents. The Department of Health is charged with day-to-day oversight of safety, but patient advocates say the agency lacks the staff and expertise to do the job adequately.

SentosaCare homes, which took in nearly $538 million from Medicare and Medicaid in 2013, aren’t the only facilities in the state with repeat violations and low staffing, and several of the company’s homes have above-average ratings on Medicare’s Nursing Home Compare web site, which rates them with one to five stars. (State-by-state inspection reports can be searched on ProPublica’s Nursing Home Inspect, which also lists deficiencies by severity level.)

But federal data through August shows that 11 of SentosaCare’s homes exceeded the state average of 24 violations over the past three years, and three had double that number.