PROVIDENCE, R.I. (WPRI) – The R.I. Veterans Home must pay back $5 million to dozens of residents – both living and dead – after a federal investigation revealed the nursing home for wartime veterans improperly billed certain residents for seven years.
The U.S. Department of Veterans Affairs launched the investigation earlier this year after an anonymous complaint was lodged with the federal agency, alleging the Bristol-based long-term care facility was improperly billing residents with a 70% disability rating or higher.
The complaint was spurred in part by a change in policy last year, first reported by Target 12, which required residents to start paying out-of-pocket costs for occupational and physical therapy.
The VA determined the occupational and physical therapy fees were allowable under its rules, but through the investigation it discovered several residents were being charged “maintenance fees” equaling 80% of their monthly incomes that weren’t allowed.
“The allegations that veterans are paying out of pocket expenses for services that should be covered under their care … was reported as substantiated,” wrote Dr. Scotte Hartronft, executive director of the U.S. Office of Geriatrics and Extended Care, a VA division, in a letter dated June 19.
R.I. Office of Veterans Services director Kasim Yarn first shed light on the issue at the end of July, telling state lawmakers his department was financially exposed based on the federal ruling. At the time, Yarn said the improper billing affected 19 residents and would cost the state $2 million under a worst-case scenario.
On Wednesday, Veterans Home spokesperson Meghan Connelly said the state is now on the hook for about $5 million and the improper billing affected 56 current and former residents. Thirty of those 56 residents have died, according to Connelly.
“For those veterans who have since passed away, we will be implementing a process to refund their next-of-kin or estates, in accordance with Rhode Island laws,” she wrote in an email.
Under certain circumstances, the nursing home has the authority to assume control of residents’ estates if they die without wills, but Connelly said the state hasn’t determined yet whether any of the recipients fall under that category.
Connelly noted that the improper billing started in 2013 “under a prior administration,” and the VA had never raised it as a concern – despite conducting annual audits of the long-term care facility.
“Our group didn’t really know it was an issue and didn’t know it shouldn’t be collecting the fees,” she said.
In 2013, Lincoln Chafee was governor and the Office of Veterans Services was not yet its own state agency, but rather a division of R.I. Human Services. But the agreement made at the time between the VA and the Veterans Home was nonetheless signed by Rick Baccus, who served as the nursing home’s administrator until he resigned on June 30.
“If a state home enters into an agreement with VA to provide nursing home care to certain eligible veterans at a prevailing rate, the state home cannot charge any individual, insurer or entity (other than the VA) for the nursing home care paid for by VA under such agreement,” Hartronft wrote in his letter. “An agreement was signed by Rick Baccus on January 25, 2013.”
Hartronft requested that the Veterans Home “cease and desist further maintenance fee charges to all veterans who qualify,” and state officials said they plan to submit a corrective action plan to the VA on Sept. 13.
“The process of repayments will begin in accordance with the corrective action plan once the plan is approved,” Connelly said.
Residents and families were notified of the change in billing on Aug. 3, she added, saying the Veterans Home is currently following-up with impacted residents and families.
“Upon learning of this error, we ceased collecting the fees,” Yarn said in a statement Wednesday. “Our number one priority is the health, comfort and safety of the men and women who have chosen to make the Rhode Island Veterans Home their place of residence. We are entrusted with not only their care, but also their trust, and we are working diligently to correct this error and return all funds due to the residents.”