Shameful act of brius healthcare

It's understandable if you missed it. After all, the bombshell report dropped on New Year's Eve amid a torrent of headlines about surging COVID-19 hospitalizations and deaths, as well the president's election denial, just days before an insurrection at the U.S. Capitol turned the world on its head.

But the Washington Post published a devastatingly thorough investigative report on Brius Healthcare, which owns 80 nursing homes in California, including four in Humboldt County, making it the state's largest for-profit nursing home operator. The Post's story detailed how Brius turns hundreds of millions of dollars in annual Medicare and Medicaid funding to care for elderly or infirm patients into massive profits through the use of so-called "related-party transactions," in which its homes pay other companies owned by the same people marked-up fees to provide services. Essentially, Brius' owners — in addition to taking the company's profits — pay themselves through sister companies that charge Brius inflated prices.

To those paying close attention, this shouldn't be shocking. After all, in 2016 the Journal's Linda Stansberry documented how Brius' local homes, which represent a virtual monopoly on skilled nursing care in Humboldt County, shunted some $5 million to related companies to pay for everything from rent and medical supplies to management services. This while the company reported statewide profits of $77 million in 2014.

But the Post's report cast a far wider net than the Journal's, poring through scores of tax documents from companies owned by Brius' owner Shlomo Rechnitz and his family members. The investigation found that in 2013 alone, Rechnitz and his wife reported income of at least $31 million from related companies that provide services to Brius' nursing homes. In 2018 alone, the Post reported that Brius paid more than $100 million to related companies, spending on average 40 percent more per bed on related-party transactions than other for-profit nursing homes in California.

And we can't forget that this is also a company that once refused to accept new patients — a move that had wide ripple effects that impacted local hospitals in desperate need to transfer patients to free up beds and, in some cases, forced frail patients to be transferred hundreds of miles away from their support systems and loved ones — as a bargaining ploy to extract more taxpayer dollars in the form of higher reimbursement rates just two years after banking $77 million. It's also a company that has long faced allegations — and a host of sustained findings — of inadequate care.

While welcome and revelatory, the Post's report would also be maddening — coming years after the Journal's reporting and a subsequent state audit that found Brius was using a web of related companies to bilk massive profits with ineffective state oversight — even if published in normal times.

But these aren't, of course, normal times.