Medford nursing home settles with state, agrees to reforms

A Medford nursing home whose owners were accused of paying themselves millions in public funds while slashing costs that jeopardized patient care agreed Tuesday to pay $28 million and adopt a host of reforms to settle a lawsuit filed by the state attorney general.

Medford Multicare Center for Living — the home where a resident died in 2012 after the staff failed to connect the patient to a ventilator and ignored alarms that indicated the patient stopped breathing — has also agreed to hire an outside operator and a financial monitor to oversee the 320-bed facility for five years.

Attorney General Eric T. Schneiderman, in the lawsuit filed in state court in 2014, accused the six owners of corporate looting for diverting $60 million of the $280 million in Medicaid funds toward exorbitant salaries, management fees and charitable donations to their family-controlled private foundations since 2003.

“Today we have taken significant steps to ensure residents at Medford receive necessary and proper care, and that the tragic events of 2012 are never repeated,” Schneiderman said in a statement. “This settlement sends a clear message that those who profit from Medicaid at the expense of nursing home residents will be held accountable.”

Of the $28 million, $10 million will go to reimburse the state Medicaid program and $9 million will be set aside in a fund to carry out future reforms to improve the quality care for the residents at Medford Multicare. The remaining $9 million includes some money the nursing home already spent last year to improve patient care.

The owners — Mordechai Klein; Susan Aschkenazi; Norman Rausman; and Rausman’s kin, Martin Rausman, Michael Rausman and Henry Rausman, all of Monsey — are pleased with the settlement, said Gregory Nespole, an attorney for the nursing home. Susan Aschkenazi became an owner after the death of Mendel Aschkenazi.

“The owners of the facility are grateful to have this behind them, and look forward to working with the attorney general and others to make Medford one of the top facilities in the state,” Nespole said.

Schneiderman’s office also brought criminal charges against the nursing home and its nine employees after investigators discovered that Aurelia Rios, 72, died Oct. 26, 2012, because seven employees failed to do their jobs, and two others attempted to hide the true cause of her death.

All nine employees have been convicted of various crimes. Some have served jail time. Others are appealing their convictions.

The nursing home, which had pleaded guilty to one count of first-degree attempted falsifying business records, is scheduled to be sentenced Wednesday by state Supreme Court Justice John B. Collins in Riverhead. As part of its guilty plea in the criminal case, the corporation has agreed to pay a $10,000 fine and settle the lawsuit.