Busted: Nursing Home Fined for Allegedly Dumping Out Residents to Make Room for More Profitable COVID Patients


In a case of government incentives allegedly gone horribly awry, a Los Angeles nursing home is paying a six-figure fine after being accused of dumping its residents out to make room for more profitable COVID patients.

According to the Los Angeles Times, the Lakeview Terrace skilled nursing facility engaged in “sustained” and “intentional” misconduct by, among other things, discharging some of the long-term residents of the 99-bed facility to make room for coronavirus patients, who commanded a higher premium.

“This victory for these patients is all the more important given COVID-19’s devastating impact on nursing home residents in L.A. and across the nation,” Los Angeles City Attorney Mike Feuer said in a statement announcing the settlement with Lakeview Terrace.

Feuer said he thought the settlement would result in “dramatic improvements in patient care, new COVID-related protections [and] improved oversight when patients are discharged.”

If Lakeview Terrace did what it’s accused of, one hopes so. Last summer, Feuer’s office filed suit against the facility for its mistreatment of patients — the second such suit against Lakeview Terrace in two years, it must be noted.

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“According to the complaint, over the past several months, Lakeview Terrace Skilled Nursing Facility has allegedly unlawfully discharged sick, elderly and disabled patients into facilities unable to care for them, without getting consent from these patients or their families — a practice known as patient dumping — to make room for new, incoming patients,” a news release from Feuer’s office from last July read.

“Nursing homes receive substantially higher reimbursements for Medicare-covered patients, and can receive up to $600 more per patient in reimbursements for Medicare patients suffering from COVID-19. Typically, however, reimbursement rates decrease the longer a patient remains in a facility. Thus, nursing homes are incentivized to make room for new Medicare patients, even if it means discharging existing patients without regard to their health and safety.”

In one case mentioned in the lawsuit, an 88-year-old man suffering from dementia was transferred to a boarding house in nearby Van Nuys, according to the Times. A day later, he was found wandering the streets. A second case involved an HIV-positive man who was discharged and later found hiding in a friend’s backyard to avoid the coronavirus.

“Although Lakeview disputes the underlying allegations, the costs associated with litigating against the City are most appropriately put towards resident care,” the facility’s administrator said in an email to the Times.

Were government incentives responsible for this?

Thus, the facility will pay $275,000 and double its nursing staff, along with allowing increased oversight by the government, as a result of the settlement.

Lakeview Terrace’s problems with the law didn’t begin with the COVID incentives provided under Medicare, and Feuer’s complaint encompassed a bit more than pandemic-related patient dumping.

For instance, the city attorney’s office alleged chronically ill patients weren’t given critical medication even though Lakeview still billed the government for it. These weren’t minor oversights, either.

According to the city attorney’s news release, in one case, an HIV-positive patient was allegedly denied 414 of 654 of his prescribed medication doses — over 63 percent. Another patient with respiratory problems was denied 176 doses of his inhaler.

“The City Attorney’s Office alleges that to conceal this abuse and neglect, Lakeview Terrace went so far as to falsify medical records,” Feuer’s July complaint read.

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“Staff allegedly signed hundreds of records falsely indicating that they had administered medication to patients when they had not, misleading regulators, the Monitor and the physicians responsible for the patients’ care.”

And, again, they apparently don’t need a pandemic to do this. In 2019, Feuer’s office secured a six-figure settlement from the home, again over issues of patient dumping.

The Lakeview Terrace case touches on a raw nerve for many conservatives, however, which is that hospitals and care facilities are paid if a patient is coded as having COVID-19.

As part of the CARES Act, providers were given a 20 percent “add-on” to reimbursement for any patient with the coronavirus. This, as the Daily Wire pointed out in April of last year, didn’t even require testing.

To the extent anyone paid attention to this, it mostly had to do with whether this gave hospitals incentives to inflate the case count. This sent liberals and fact-checkers (but I repeat myself) into paroxysms, accusing anyone who raised the question of conspiracy theorizing.

(For whatever it’s worth, systematic case inflation has yet to be proven and there are significant penalties for so-called “upcoding” that would severely disincentivize it — but the question was never as illegitimate as the media has treated it, particularly given some egregious examples of COVID death inflation.)

Even if there wasn’t case-count inflation, that doesn’t mean the incentives created by the CARES Act didn’t have negative consequences, particularly given the lack of oversight built into it. Lakeview Terrace is a case in point.

My assumption is that it wasn’t the first — or the last — facility that looked at the 20 percent premium for treating COVID patients and got dollar signs in their eyes.

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C. Douglas Golden is a writer who splits his time between the United States and Southeast Asia. Specializing in political commentary and world affairs, he's written for Conservative Tribune and The Western Journal since 2014.
C. Douglas Golden is a writer who splits his time between the United States and Southeast Asia. Specializing in political commentary and world affairs, he's written for Conservative Tribune and The Western Journal since 2014. Aside from politics, he enjoys spending time with his wife, literature (especially British comic novels and modern Japanese lit), indie rock, coffee, Formula One and football (of both American and world varieties).
Morristown, New Jersey
Catholic University of America
Languages Spoken
English, Spanish
Topics of Expertise
American Politics, World Politics, Culture