$1.6 Million Fine for Health Care Fraud

ST. LOUIS (CN) - Five nursing homes accused of gross negligence pleaded guilty to federal felony charges of health care fraud. Texas-based Cathedral Rock, which owned and operated the homes, will pay $1 million in criminal fines and penalties and $628,000 to resolve civil claims of defrauding Missouri Medicare and Medicaid.

C. Kent Harrington, Cathedral Rock majority owner, also entered into a deferred criminal prosecution agreement for 2 years.

The nursing homes admitted understaffing homes, not providing wound care at various times, not giving residents their medication as prescribed, falsifying medical records, and submitting false Medicare claims for services that were not performed or were worthless.

The five nursing homes have shut down.

Prosecutors painted a disgusting picture of life in the homes. Residents suffered from malnutrition, dehydration, pressure sores and other side effects from not receiving their proper medications. There was widespread falsification of medical records and residents were allowed to walk away from facilities unnoticed for several hours. Some residents had to have amputations because of untreated pressure sores and in some cases the pressure sores became infested with maggots.

Harrington, 60, for Ft. Worth, has also been charged individually with defrauding Medicare and Medicaid by sending in false statements. Harrington agreed to start a compliance program in the remaining facilities he owns and operates. If he complies, his federal felony complaint will be dismissed on Jan. 7, 2012.

The pleas also settle a whistleblower suit filed in 2003, which prompted the federal investigation. The whistleblowers stand to gain $94,200.

Cathedral Rock's Web site states that the company owns 15 homes in Texas and New Mexico, with 1,308 beds.

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