Nursing-Home Chain Will Pay Fine of $600,000 in Nine Patient Deaths
Beverly Enterprises, a Pasadena-based nursing-home chain cited by the state for 50 health and safety violations, agreed Thursday to pay more than $600,000 in fines to settle allegations that nine patients died due to improper care.
Under the settlement, three of Beverly’s 93 homes in California, including the two where the deaths occurred, will be placed on four years’ probation. In addition, the state Department of Health Services will not grant Beverly any new licenses for 14 months after its seven pending applications are processed.
Health Director Kenneth W. Kizer said the “landmark” settlement “will have . . . wide ramifications on the nursing-home industry in California.”
Yet Beverly, the nation’s largest chain of nursing homes, emerged with provisional approval to operate 10 additional facilities whose future had been jeopardized by the state’s lawsuit. The health department previously had sought to revoke the licenses of three Beverly facilities, deny seven pending license applications and fine Beverly more than $800,000.
“I think the settlement will have more psychological impact than financial,” said Randall Huyser, a health-care analyst at Montgomery Securities in San Francisco. “The state is trying to make an example out of them because they are the largest in the industry.”
Kizer disagreed, however. “We think . . . it a good resolution. It’s a record amount.” The terms indicate what he called the department’s “more aggressive approach to enforcement.”
Robert Van Tuyle, Beverly’s chairman, did not return a reporter’s phone calls on Thursday. But in an earlier interview, Van Tuyle said the problems cited by the health department had been corrected and that the deaths were due to the patients’ ages, not to substandard care.
However, Janet G. Sherwood, a deputy state attorney general who handled the state’s case, said Thursday that Beverly “caused the deaths of three patients” and was a “contributing factor” in the other six cases.
With the settlement, Sherwood said, Beverly now has an “incentive to toe the line” or face “loss of 10 facilities. That’s a severe penalty,” she added.
During the four-year probation period, any serious violation could result in outright revocation of operating licenses for the three nursing homes, which are licensed to operate 271 beds. Their closure and disapproval of the seven facilities could pose a significant setback for Beverly. The company views California’s 2.6 million residents age 65 years or older as a prime source of new business.
Department officials say Beverly has been among a flood of nursing-home operators seeking permission to build new facilities in California because of a shortage of beds in the state and the impending Jan. 1 expiration of a state law that subjects new nursing homes to additional review by the office of statewide health planning and development.
Last year, the state health director revoked six nursing-home licenses, according to the Department of Health Services. In all of 1984, there were three. Total fines assessed increased to $5.3 million in 1985 from $1.4 million in 1984, Kizer said.
