$1.8 Million in COVID-19 Stimulus Money May Have Been Diverted From Sioux City Nursing Home

Posted on behalf of Jeff Pitman on February 22, 2023 in Nursing Home Abuse
Updated on March 6, 2023

red stimulus stamp on 100 dollar billsA Sioux City, Iowa nursing home facility, Touchstone Healthcare Community, shut down last summer and declared bankruptcy amid a legal battle. The owners of Touchstone have been accused of purposely defrauding its creditors. However, the owners have made their own allegations against the facility’s management company, Health Dimensions Consulting (HDC). These allegations accuse HDC of redirecting $1.8 million of the facility’s COVID-19 stimulus payments.

Indian Hills Health Care, the Iowa company that owns Touchstone, was sued by Health Dimensions Consulting (HDC) in March 2022. HDC served as the management company for Touchstone. HDC’s lawsuit says it was hired to manage the nursing home in the early part of 2019. Under the contract, HDC was to receive $33,000 as payment for those services each month, or 5.5 percent of the facility’s gross revenues, whichever amount was greater.

The lawsuit says Indian Hills started falling behind in payments in May 2021. A few months later, in August 2021, HDC discontinued providing services to Touchstone. HDC claims it is still owed $129,000.

HDC’s lawsuit led to a counterclaim by Indian Hills. Their claim was filed in federal court, and states that HDC sought advances on payments from Medicare or Medicaid, totaling $500,000. The counterclaim also says HDC transferred COVID-19 stimulus money that was awarded to the nursing home.

The judge hearing the case issued a stay after Indian Hills filed for bankruptcy. In the bankruptcy case, Indian Hills reported assets of $145,397 and debts of $8.1 million. This includes a debt of $3 million to the U.S. Department of Housing and Urban Development. Indian Hills also owes $447,000 to the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services.

Lawsuits Against Touchstone Healthcare Community

Touchstone Healthcare Community was sued multiple times by other vendors who claimed bills were not being paid and the facility owed more than $500,000 to creditors.

In July 2022, Iowa regulators intervened when the facility informed them that they could not make payroll. The Iowa Department of Inspections and Appeals requested that a judge appoint a receiver to handle the operation of the nursing home. Not long after that the nursing home was closed.

Health Services Group (HSG) sued Indian Hills at about the same time. HSG’s lawsuit says Touchstone accumulated more than $860,000 in debt, but Touchstone told creditors it sold its business to another company responsible for paying bills.

HSG claims this is not true, and that Indian Hills continued accumulating debt. HSG alleges it is owed $483,000. HSG claims Indian Hills was deliberately defrauding vendors like HSG.

Violations at Touchstone Healthcare Community

Between last summer and early 2019, Touchstone was cited for approximately 116 violations. The facility also had $195,000 in federal fines.

Prior to July, 2021, Touchstone was also on the Special-Focus Facilities list for over 44 months. Only two other facilities in the country have remained on the SFF list for that length of time.

The Special-Focus Facilities list is maintained and published by the Centers for Medicare & Medicaid Services (CMS) agency. It includes the worst-performing nursing homes in the country. More specifically, these facilities have more than twice the average number of serious issues. To reach this degree of deficiency and be added to the SFF list, a facility typically includes cases where there were cases of residents suffering severe harm or injury over a period of three years or longer.

Although the facility was removed from this list in 2022 briefly before being put back on it. However, by the time the facility was put back on the list, it had already closed. The district court for Woodbury County deemed the situation at Touchstone to be an emergency situation that presented “an imminent danger to the residents.”

Contact PKSD if Your Loved One Suffered Nursing Home Neglect

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