Florida nursing home where 8 died in sweltering heat following Irma had poor record with regulators

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HOLLYWOOD, Fla. — The Hollywood Hills nursing home where eight elderly people died Wednesday morning has a history of poor inspections and is affiliated with a South Miami hospital with a troubled past of its own.

The Rehabilitation Center at Hollywood Hills has a health inspection rating of “much below average” by the Florida Agency for Healthcare Administration, which evaluates all long-term care facilities in the state for the U.S. government. Its “overall rating,” which includes staffing, fire safety and health inspections, was “below average.”

The nursing home’s licensee is Rehabilitation Center at Hollywood Hills LLC, which is owned by a doctor named Jack Michel. State health care records list Michel as an officer and board member of the nursing home, with a controlling interest.

But the home also has a relationship with Larkin Community Hospital, which has a long history of running afoul of health care regulators. Michel is listed in state corporate records as Larkin’s president, as well. In 2006, the U.S. Justice Department fined Larkin and its owners $15.4 million in a settlement of a civil fraud complaint.

Eight of the nursing home’s residents died Wednesday after they fell ill in a building that had been left without air conditioning after Irma blasted South Florida, according to authorities at the scene.

Hollywood Fire Rescue evacuated residents from the rehab center on North 35th Avenue after some residents awoke sick. Like many places in South Florida, the nursing home has been without power since being battered by tropical storm winds and hurricane gusts on the edge of Hurricane Irma.

A kitchen worker, Jean Lindor, told the Miami Herald the center had power from a generator to cook — but no air conditioning.

On Wednesday afternoon, Gov. Rick Scott said he would “aggressively demand answers on how this tragic event took place.”

“I am absolutely heartbroken to learn of news reports of the deaths of multiple individuals in a nursing home in Broward County. Protecting the lives of Floridians is my top priority and that’s why we have worked all week to help Floridians prepare and respond to Hurricane Irma,” Scott said. He added: “Although the details of these reported deaths are still under investigation, this situation is unfathomable.”

The center is located across the street from Memorial Regional Hospital, which never reported losing power during Hurricane Irma.

The rehab center’s administrator, Jorge Carballo, said the home “is cooperating fully with relevant authorities to investigate the circumstances that led to this unfortunate and tragic outcome. Our hearts go out to the families and friends of those who were affected.

“The Rehabilitation Center at Hollywood Hills has evacuated this morning due to a prolonged power failure to the transformer which powered the facility’s air conditioning system as a result of the hurricane. Unfortunately, early this morning several patients experienced distress and there were three fatalities at the facility and three at the hospital they were transferred to,” Carballo added. The toll was updated to eight later in the afternoon.

The Florida Health Care Association, a long-term care industry group, released a statement Wednesday morning framing the deaths within the context of Irma’s brutal blow to the state.

“Our centers’ first priority is always the safety and well-being of every resident in their care and they are doing everything in their power to meet their immediate and ongoing needs,” wrote the association’s executive director, Kristen Knapp.

“As with millions of other Floridians, our centers are coping with the loss of power and infrastructure in the communities that were most affected by the devastation. Approximately 150 facilities out of the nearly 700 facilities in the state do not currently have full power services restored.

“The loss of these individuals is a profound tragedy within the larger tragedy of Hurricane Irma, and we extend our deepest sympathies to the families of these residents,” Knapp said.

In July 2015, Larkin Community Hospital issued a news release announcing it had won a bankruptcy auction and was taking over operations of the 152-bed Rehabilitation Center at Hollywood Hills, as well as other properties. The reason for the auction: The previous owner was in prison for Medicare fraud.

Both the nursing home and adjacent psychiatric hospital, Hollywood Pavilion, were owned by the family of former CEO Karen Kallen-Zury.

In 2013, a federal jury convicted Kallen-Zury of Lighthouse Point and three other Pavilion employees of conspiracy, saying they had bilked Medicare of $67 million by filing phony claims for mental health services form 2003 to 2012. Medicare was duped into paying about $40 million to Kallen-Zury’s company. Of those defendants, Kallen-Zury received the longest sentence: 25 years.

Larkin and Michel bid $24.6 million for the properties, the news release said. “This acquisition represents another step in the evolution of our hospital into an integrated delivery system,” Michel, identified as Larkin’s president, said in the news release.

Larkin Community Hospital, which is based in South Miami, and its owner, Michel, have had a long relationship with a now-indicted health care businessman, Philip Esformes.

Esformes, his attorney, Michael Pasano said, “has no interest or involvement in Michel’s ownership of the nursing home in Hollywood where the ... patients died.”

In 2006, Esformes, his father, Morris Esformes, Larkin’s Michel and the hospital’s previous owner, James Desnick, settled a civil dispute with the U.S. government for $15.4 million over allegations that they paid kickbacks to physicians in exchange for referring patients to Larkin.

Back then, Esformes owned a chain of Miami-Dade assisted-living facilities and supplied patients to Larkin. The patients then were returned to his facilities and recycled again, according to the settlement.

In a similar scheme, Esformes was indicted last year in a $1 billion Medicare fraud case that prosecutors called the largest in the nation.

Esformes, a wealthy Miami Beach executive who has been held without bond since his arrest, is accused of exploiting a network of about 20 Miami-Dade skilled-nursing and assisted-living facilities to fleece the taxpayer-funded Medicare program. His network filed false claims for services that were not necessary, or, in some instances, not provided to about 14,000 patients, the indictment says.

Larkin, though not identified in the Esformes indictment, referred many of those Medicare patients to his network through kickbacks to doctors and other medical professionals, prosecutors say. Esformes, in turn, recycled the same patients back through the hospital after they stayed in his network.

Larkin’s owner, Michel, is not identified in the Esformes indictment.

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(Miami Herald staff writers Daniel Chang and Jay Weaver contributed to this report.)

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