The skilled nursing industry was rocked this week by the news that KBWB Operations, operating as Atrium Health and Senior Living, and its CEO, Matthew Breslin, pleaded guilty to charges of healthcare fraud and tax conspiracy. This case, stemming from a complex scheme that defrauded investors, staff, and vendors, serves as a stark reminder of the critical need for ethical and responsible conduct within the long-term care sector.
According to the Department of Justice, Atrium, which once operated facilities across Wisconsin, Michigan, and New Jersey, prioritized payments to investors while neglecting essential operational needs. This included failing to pay vendors, withholding employee insurance premiums and 401(k) contributions, and even neglecting to remit payroll taxes to the IRS.
“The defendants’ alleged actions resulted in failing to meet the required federal regulations governing skilled nursing facilities, including not operating the KBWB-Atrium Wisconsin skilled nursing facilities in a manner that would enhance residents’ quality of life,” stated the Department of Justice.
This case highlights a disturbing trend. The National Center on Elder Abuse reports that “financial exploitation is a growing problem in nursing homes, with estimates suggesting that as many as 1 in 10 residents may be victims.” The Atrium case demonstrates how such exploitation can occur at a systemic level, jeopardizing the well-being of residents and staff alike.
The guilty plea carries significant consequences. Breslin faces a potential 10-year prison sentence for healthcare fraud and a 5-year sentence for tax conspiracy. Furthermore, both Breslin and KBWB Operations may be excluded from participating in the Medicare and Medicaid programs, effectively barring them from future operations in the skilled nursing sector.
This case underscores the importance of robust oversight and accountability within the nursing home industry. Providers must prioritize resident care and financial transparency to maintain the trust of residents, families, and the public.
“Americans rely on skilled nursing facilities to care for themselves, family members and other loved ones, and the operators of these institutions must live up to their obligations and the law,” emphasized Acting Assistant Attorney General Brett A. Shumate.
The Atrium case serves as a wake-up call for the industry, highlighting the severe repercussions of financial mismanagement and fraudulent practices. It is a reminder that ethical conduct and resident well-being must always be at the forefront of skilled nursing operations.