Michigan nursing home chain got millions of dollars for woeful care, AG says

State Attorney General Dana Nessel is suing the owner of nine nursing homes in southeastern and central Michigan
The nine-home chain, she said, received millions of Medicaid dollars for resident care, even as residents languished
The state’s lawsuit echoes the findings of a Bridge investigation last year that found that chronic understaffing at many homes led to loneliness, pain and sometimes preventable death

LANSING — A Michigan nursing home chain collected $111 million in taxpayer dollars even as it left residents untended and unsafe — so much so that some required hospitalization, according to Michigan Attorney General Dana Nessel.

Owner Fahim Uddin, whose businesses operate nine nursing homes in southeast and central Michigan, “knowingly and intentionally placed hundreds of patients at risk,” Nessel told reporters Thursday, in announcing the two-year investigation and the lawsuit that culminated from it.

Uddin also funneled nearly $22 million to its related businesses, while its employees faced bounced paychecks and “significant obstacles in collecting their wages,” according to the 30-page lawsuit filed in Ingham County Circuit Court.

“Everyone, each of us, deserves respect, care, and dignity, and that is not what the residents of Pioneer Healthcare were receiving,” Nessel said Thursday. “It is outright shameful. How we treat our most vulnerable is indicative of, really, who we are as a society. If you’re looking at these particular homes, it’s a mark of abject failure.”

Uddin did not return a phone message from Bridge seeking comment.

Uddin owns Pioneer Health Care, which does business as Legacy Healthcare Management. As a nursing home chain whose residents’ care is reimbursed by Medicaid, Uddin’s facilities are responsible for tracking hours and reporting costs to the state and to the US Centers for Medicare & Medicaid Services.

But the state’s review of employees’ time sheets and nursing home documents revealed that some employees appeared to have worked more than 24 hours a day or were in two places at one time — all the while the facilities were chronically understaffed, the lawsuit alleges.

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Moreover, for those periods that Nessel’s office reviewed, Uddin failed to have enough staff to adequately support residents’ needs 96% of the time.

Collectively, the homes served about 400 residents in Wayne, Macomb, Oakland and Gratiot counties. They were reimbursed about $111 million between 2020 and 2025, Nessel said.

They are, according to the lawsuit:

In Wayne County: Heritage Manor Nursing & Rehab Center, Northville Manor, and Pine Creek Manor Skilled Nursing & Rehab Center
In Macomb County: Lakeside Manor Nursing & Rehabilitation Center and Regency Manor Nursing & Rehabilitation Center in Macomb County
In Oakland County: Oakland Manor and Oakridge Manor Nursing & Rehab Center
In Gratiot County: Ashley Healthcare Center and Riverside Healthcare Center

The lawsuit is a dramatic departure from the state’s previous efforts to address allegations of poor quality care. Typically, an individual worker might face criminal charges for harm to residents in long-term care — such as when a resident walks away from a facility unintended or when a preventable accident or death occurs.

Advocates have long said incidents are often the result of overwhelmed or undertrained employees making decisions on shifts with too few staff.

In contrast, the lawsuit is an effort toward more systemic change, aimed at the nursing home operator, said David Tanay, who led the investigation for the attorney general’s office.

Nessel accused Uddin of violating the Michigan Medicaid False Claim Act.

Uddin and his nursing facilities fell short of a standard to “staff to the acuity needs of residents,” according to the lawsuit.

Because of the understaffing, the lawsuit alleges, residents “sustained injuries without staff present, developed pressure injuries that went unidentified and untreated, were abandoned and were refused readmission, were ignored when calling for help, were left in soiled linens and briefs,” among other things.

The lawsuit Thursday specifically alleges facilities:

Failed to meet shift ratios at least 496 times,
Failed to provide not less than 2.25 hours of nursing care per resident, per day at least 1,454 times – higher than any other nursing home chain with four or more facilities in Michigan
Failed to staff a registered nurse for at least eight consecutive hours a day, seven days a week, as required by federal law at least 4,658 occasions

Bridge finds broader problems in Michigan

The findings mirror those of a Bridge Michigan investigation earlier this year that found abuse and neglect in dozens of Michigan’s nursing homes, often driven by chronic understaffing, according to state investigation reports. And while other states have cracked down on poor-quality homes and boosted efforts to provide more spending on resident care and require more transparency in reporting, Michigan’s lawmakers have done little.

For example, the US Centers for Disease Control and Prevention in 2001 recommended 4.1 hours of care per day per resident. Michigan requires 2.25 hours — a level unchanged in 45 years. New Jersey, Pennsylvania, and Virginia, for example, have passed laws increasing minimum staffing standards.

In some cases, people languished in their own waste, without food, and with little human contact. Accidents, often linked to untrained or too few staff, led to hospitalizations and, in some, death.

Audit criticizes reporting system

Nessel announced the lawsuit — coincidentally according to the AG — a day after the Michigan Auditor General issued an update on its 2019 report that criticized the state for using a cost reporting system that is “complicated, labor intensive, ineffective and inefficient.” Michigan is one of only two states that uses this system.

In fact, Nessel’s investigation also referenced the reporting as a systemic vulnerability for residents. Nursing homes are able to move money to “related parties” as profits — even if residents suffer from short staffing, she said.

It was a problem outlined last year in a report, in part, by the Michigan Elder Justice Initiative. In it, authors pointed to four nursing home chains they said may be able to hide profits by creating affiliate companies. Some of those same homes, the report alleged, had faced a ‘disproportionate’ number of care complaints in recent years.

A woman at a podium during a press conference — Alison Hirschel of the Michigan Elder Justice Initiative and others have demanded more transparency in nursing home cost reports. As it stands now, owners may transfer funds to their other businesses, siphoning dollars toward profit rather than resident care, she said. (Robin Erb/Bridge Michigan)

Alison Hirschel, the organization’s director, was on hand for Thursday’s announcement, thanking Nessel’s office for their work.

“When nursing homes assert that they don’t receive enough reimbursement to do better, we don’t know if that’s because they really don’t receive enough money in total public funds, or if they simply skim so much off in profits that there isn’t enough left over to care for residents,” Hirschel told reporters Thursday.

She and Nessel made clear: There are quality nursing homes in Michigan that provide high-quality care.

“We know that good care is possible because our ombudsmen visit good nursing homes with sufficient staff, where residents are cared for in a responsive, warm, loving, quality environment,” Hirschel said.

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