Genesis HealthCare, one of the biggest nursing home chains in the United States, paid one of its executives a $5.2 million bonus even as it lost thousands of residents to Covid-19. According to a recent report in the Washington Post, Genesis paid George Hager Jr. the bonus in late October. He retired as the head of the chain on January 5, 2021. Though he will pay back part of the bonus, the Post reports, he will also “be reimbursed over the next two years,” and received payments totaling $950,000 from the company as he left.
Over the course of the Covid-19 pandemic, “more than 300 Genesis nursing homes experienced 14,352 confirmed cases of covid-19 through mid-December,” according to the Post. A total of 2,812 nursing home residents had died from Covid-19 by December 20th. The Post also reports that Medicare data revealed that the company’s nursing homes “reported continuing shortages of personal protective equipment through the months of the pandemic,” an issue that only improved around the end of November 2020, after Genesis Healthcare’s board approved the $5.2 million bonus to Hager.
The Post notes that Hager’s base salary as head of the nursing home chain was $900,000, and that he received an annual bonus of $935,000 in 2020. The director of an advocacy group told the Post of the bonus, “5.2 million is a lot of money given that nursing homes have been squawking about a lack of cash… Yet they can take care of those they love best — those at the top.”
A lobbying group that represents for-profit nursing home chains has reportedly been pressing the federal government for more funding for nursing homes. The head of the organization told the Post, “Our nursing home providers are facing the worst financial crisis in the history of the industry due to increased costs related to covid… Without adequate resources, the U.S. will repeat the same mistakes made during the initial outbreak last spring.”
That group reportedly stated that a survey of its members found that most of them—86%—”are operating at a profit margin of 3 percent or less.” Still, as the Post notes, some nursing home companies “have become adept at funneling profits to affiliated companies, from which they buy a variety of services.” The Post found that Genesis HealthCare is one such nursing home chain, and that it is “within the top five chains nationally in the amount of money each nursing home pays to affiliated entities.” The report suggests that when nursing home chains spread their income streams like this, “care suffers,” and that it’s for-profit nursing home companies like Genesis HealthCare (and which reportedly account for 70% of nursing homes in the country) use this practice more than non-profit nursing homes.
Genesis HealthCare reportedly has suffered more financial difficulties than other nursing home chains, even though it reported the receipt of $254 million in federal relief funding during the pandemic, as well as “pledges of $85 million from several of the states where it operates.” The Post reports that the nursing home chain also received $90 million in payroll tax deferrals, and $157 million in Medicare prepayments that functionally served as “an interest-free loan.” Nonetheless, according to the Post, the nursing home chain “reported a loss of $96 million for its 360 nursing homes and assisted-living centers” during the first three quarters of 2020. Its Covid-19 death rate, meanwhile, “was higher than among some of the major competitors,” with 1 death for every 12.5 beds; similar chains described by the Post had rates of 1 death for every 14.3 beds, 1 death for every 20 beds, and 1 death for every 16.7 beds, which the Post describes as “about the national average.”
The attorneys at the Law Offices of Thomas L. Gallivan, PLLC work diligently to protect the rights of nursing home residents. Please contact us to discuss in the event you have a potential case involving neglect or abuse.
