Lawsuit: Nursing Home Companies Take Patient Care Money for Profits
A new lawsuitÂ filedÂ against Country Villa Health Services alleges that state regulators are allowing nursing home companies to take money from patient care to boost corporate profits, California Watch reports.
Country Villa operates 50 skilled nursing and assisted-living facilities throughout California.
The lawsuit was filed by Glendale attorney Russ Balisok -- who has been involved in several lawsuits against nursing homes -- on behalf of California Advocates for Nursing Home Reform.
Details of the Case
The suit focuses on state-approved agreements in which Country Villa facilities offer operating contracts to other Country Villa entities. The management company receives a percentage of revenues from the facilities it operates.
Balisok alleges that Country Villa draws money from the facilities without performing operating functions.
He said, "It's just their way of taking 5% off the top and leaving the nursing home with insufficient resources so that nursing homes limp along with poor care for patients," adding, "I want the 5% back."
The lawsuit also names the director of the Department of Public Health as a defendant.
Previously, Balisok has argued that federal law prohibits state nursing homes from being operated by outside companies.
Response to Lawsuit
Country Villa in a statement said that it is in full compliance with state and federal laws.
Mark Reagan -- general counsel for the California Association of Health Facilities -- said Country Villa officials "are following California law, they are being transparent, they get state approval, and there's no reason they should be embroiled in the lawsuit as a result."He added that there is no evidence that outside management contracts negatively affect quality of care (Evans, California Watch, 11/28). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.