Fortune awaits former CEO

Bankrupt nursing home cited for mistreatment wants to hand ex-boss $56 million package

By Ann Imse

Denver Rocky Mountain News Staff Writer

October 22, 2000

Integrated Health Services is bankrupt. It runs one of the worst nursing homes in Colorado. And it wants to pay former CEO Robert Elkins $56 million in severance.  Other IHS executives could get $10 million in severance if a bankruptcy court judge approves the deals.  Eight of the 11 IHS nursing homes in Colorado have been cited for harming patients in the past two years. (Four of the 11 were sold July 1.)  IHS-Cheyenne Mountain in Colorado Springs alone has been cited for harming patients 21 times since 1998, one of the worst records in Colorado.

The company declined comment on Elkins and its Chapter 11 bankruptcy, but a spokesman said IHS is working to correct its care.  "Our goal is to provide the best care we can and aim for perfection," spokesman Robert Gill said. "We are working to correct any problem found."  IHS grew under Elkins, and he became a four-time guest at White House coffees and a major contributor to the Democratic Party.

But then Medicare cut back, and the IHS stock price plummeted from $42 to 12 cents. Because his stock options were worthless, Elkins persuaded his board to give him $40 million in "loans" that did not have to be repaid. He also arranged a $3.5-million annual pension and use of the corporate jet for seven years, even if he got fired.

"What is the matter with people?" marvels Colorado nursing home ombudsman Virginia Fraser at the Elkins deal.  Elkins finally was relieved of his duties this past summer. Now, the federal bankruptcy court in Wilmington, Del., is considering paying him $56 million to settle his claims, and then hiring him back as a consultant.

IHS also owes Medicare and Medicaid $140 million, apparently for overcharging in the past. It also is being investigated for Medicare fraud, according to its securities filings.  The nursing home industry's spokeswoman in Colorado called the $56 million severance pay for Elkins "absolutely, positively unacceptable."  "I won't defend it," said Arlene Miles, director of the Colorado Health Care Association.  IHS-Cheyenne Mountain first earned notoriety in 1997, when it fired three aides accused of dealing with a cursing, flailing Alzheimer's patient by squeezing his genitals and binding him with a strip of underwear. One aide pleaded guilty to assault on 87-year-old Troy Stewart and served five days in jail. The two other aides pleaded guilty to harassment.  The short sentence infuriated Stewart's daughters, Mary Myers of Colorado Springs and Gloria Broyles of Canon City. Their father was a "sweet, loving man" until the Alzheimer's stole his mind and changed his personality, Myers said. After the assault, they moved him to Life Care in Colorado Springs, where "he received wonderful care until he died," Myers said.

Over the past two years, Colorado nursing home inspectors found patients at IHS-Cheyenne Mountain lying in their own urine and feces for hours on repeated occasions. Patients too sick to feed themselves were found hungry and thirsty.

The medical director admitted they were so short-staffed that one aide had to care for 25 to 35 patients, even though many were so ill they had to be helped to eat, drink, use the bathroom or even turn over in bed.

Inspectors repeatedly sanctioned the facility. They fined it $17,000 last year, denied payment for new Medicare/Medicaid patients for two and a half months in spring, and threatened to revoke its certification to handle Medicare and Medicaid patients, tantamount to requiring closure or sale.

Federal officials eventually ordered a temporary manager of their choice installed and that person cleaned up the problems.

But on Sept. 21, IHS-Cheyenne Mountain was again cited for harming patients, said Laura Wood of the state health facilities division.  Inspectors found four residents had been injured, and the home had not looked for the cause, records show.  One resident suffered a broken leg, even though unable to move without the help of two other people.

Another suffered a broken hip, and for five days was treated only with Tylenol for pain, because the fracture didn't show up until the third x-ray.

Colorado has now asked the federal government to fine IHS-Cheyenne Mountain and stop paying it for new Medicare and Medicaid patients. Federal authorities have not responded yet.  Despite two years of such serious, continuing problems, the facility remains open today. "Our biggest concern is transferring the residents," Wood said.  IHS spokesman Gill pointed out that the temporary manager chosen by inspectors was still in charge when the latest problems were found.

October 22, 2000