New York nursing home paying $12 million for suspected fraud, abuse

The Van Duyn Center for Rehabilitation and Nursing in Syracuse, New York, will pay $12 million after an investigation by the New York Office of the Attorney General uncovered evidence of suspected fraud and neglect.

The investigation found that the nursing home's owners, Efraim Steif and Uri Koenig, received millions of dollars of taxpayer funds meant for resident care, leaving the nursing home severely understaffed.

Residents experienced unsafe conditions, the AG said, leading to hospitalizations, deaths and significant trauma.

Of the $12 million being paid by Van Duyn, $10 million will go directly to funding improved resident care and staffing, with $2 million in restitution to New York's Medicaid program. The AG's office will also install an Independent Health Care Monitor (IHM) and an Independent Financial Monitor (IFM) to oversee and improve the nursing home's health and financial operations.

This is the fourth case in which OAG has secured major reforms at nursing homes in New York after investigating resident neglect and abuse, the office said.

WHAT'S THE IMPACT

The investigation found that Van Duyn's residents lived in unsafe conditions before, during and after the COVID-19 pandemic. Steif and Koenig operated the nursing home with insufficient staffing, resulting in severe neglect of vulnerable residents, who often had no assistance with basic daily tasks, OAG said.

A resident died after Van Duyn failed to properly communicate her care plan to staff, resulting in staff failing to assist her to the bathroom. The resident fell while she was in her room, and her nightgown caught on a door handle, strangling her to death. Nursing home staff were unaware until they later discovered her deceased, the investigation found.

Another resident was sent to the hospital after Van Duyn failed to properly monitor and treat their glucose levels. Yet another was admitted to the hospital with a bacterial infection, bed sores and dehydration after the nursing home failed to respond to the patient's deteriorating condition.

The investigation also found evidence of financial fraud. After purchasing the nursing home in 2013, the owners withdrew tens of millions of dollars for themselves by taking out a mortgage on Van Duyn's property and charging the nursing home fraudulently inflated rental payments. From 2015 to 2022, the nursing home paid its owners an inflated rent using Medicare and Medicaid funds, resulting in fewer resources available to adequately staff and maintain the facility. 

The investigation also found Steif and Koenig transferred more than $2 million to themselves over the same period by fraudulently paying themselves salaries for work, at least some of which they never performed.

THE LARGER TREND

The Independent Health Care Monitor (IHM), which the owners must pay for themselves, will oversee all healthcare operations at the facility and ensure the nursing home improves resident care. The IHM will make recommendations that Van Duyn must implement, including raising staff pay.

The Independent Financial Monitor (IFM) will ensure compliance with the OAG's settlement and the law, and prevent future fraud, OAG said.