Rehab hospitals that assist folks recuperate from main surgical procedures and accidents have grow to be a extremely profitable slice of the well being care enterprise. However federal knowledge and inspection reviews present that some run by the dominant firm, Embody Well being Corp., and different for-profit firms have had uncommon however critical incidents of affected person hurt and carry out beneath common on two key security measures tracked by Medicare.
But even when inspections reveal grave circumstances of damage, federal well being officers don’t inform shoppers or impose fines the way in which they do for nursing properties. And Medicare doesn’t present easy-to-understand five-star rankings because it does for normal hospitals.
In essentially the most critical issues documented by regulators, rehab hospital errors concerned affected person deaths.
In Embody Well being’s hospital in Huntington, West Virginia, Elizabeth VanBibber, 73, was fatally poisoned by a carbon monoxide leak throughout development on the facility.
At its hospital in Jackson, Tennessee, a affected person, 68, was discovered lifeless in a single day, mendacity on the ground in a “pool of blood” after an alarm that was presupposed to alert nurses that he had gotten off the bed had been turned off.
In its hospital in Sioux Falls, South Dakota, a nurse gave Frederick Roufs, 73, the flawed drug, one in all 26 remedy errors the hospital revamped six months. He died two days later at one other hospital.
“I can nonetheless see Fred laying within the mattress as they shut every little machine off,” mentioned his widow, Susan Roufs. “They clicked 4 of them, after which the love of my life was gone.”
Embody, which owns 168 hospitals and admitted 248,000 sufferers final yr, has led the transformation of this area of interest trade. In 2023, stand-alone for-profit medical rehabilitation hospitals overtook nonprofits because the locations the place the vast majority of annual affected person admissions happen, a KFF Well being Information and New York Occasions evaluation discovered. A 3rd of all admissions have been to Embody hospitals. Such amenities are required to offer three hours of remedy a day, 5 days per week.
Throughout the nation, there at the moment are almost 400 stand-alone rehab hospitals, the majority of that are for-profit. These hospitals collectively generate earnings of 10%, greater than normal hospitals, which earn about 6%, and way over expert nursing properties, which make lower than 0.5%, in keeping with the newest knowledge from the Medicare Fee Advisory Fee, an unbiased congressional company.
On the similar time, the variety of small, specialised models inside acute care hospitals — the place most rehab was once offered — has dwindled. There at the moment are round 800 of these, and most are nonprofits.
In its newest annual report, Embody, which is publicly traded, reported an 11% web revenue in 2024, incomes $597 million final yr on revenues of $5.4 billion.
Federal knowledge on the efficiency of about 1,100 of the rehab amenities present Embody tends to be higher at serving to most sufferers return residence and stay there. In a two-year interval ending in September 2023, Medicare rated 233 rehab amenities as performing higher than the nationwide price for this main metric, referred to as “discharge to group.” Most rehabs with higher group discharge charges are for-profit, and Embody owns 79 of them.
However knowledge from Medicare additionally reveals Embody owns lots of the rehabs with worse charges of doubtless preventable, unplanned readmissions to normal hospitals. Medicare evaluates how typically sufferers are rehospitalized for circumstances which may have been averted with correct care, together with infections, bedsores, dehydration, and kidney failures.
Embody accounts for about 1 in 7 rehab amenities nationally, however owned 34 of the 41 inpatient rehab amenities that Medicare rated as having statistically considerably worse charges of doubtless preventable readmissions for discharged sufferers. (General, charges of readmission after discharge ranged from 7% to 12%, with a median of 9%.)
And it owned 28 of the 87 rehab amenities — 65 of which have been for-profit — that had worse charges of doubtless preventable readmissions to normal hospitals throughout affected person stays. (The median for these sorts of readmissions was 5%, and charges for particular person rehabs ranged from 3% to 9%.)
Patrick Darby, the manager vp and normal counsel of Embody, strongly defended the corporate’s file in written responses to questions. He dismissed Medicare’s readmissions rankings of “higher,” “worse,” and “no completely different than the nationwide price” as “a crude scoring measure” and mentioned “efficiency is so related throughout the board.” He referred to as the violations discovered throughout well being inspections “uncommon occurrences” that “don’t assist an inference of widespread high quality issues.”
“The only and most correct cause for EHC’s success is that our hospitals present superior care to sufferers,” he mentioned, referring to Embody by its company initials.
Chih-Ying Li, an affiliate professor of occupational remedy on the College of Texas Medical Department at Galveston Faculty of Well being Professions, mentioned in an interview {that a} analysis examine she carried out discovered the revenue standing of a rehab facility was the one attribute related to larger unplanned readmissions.
“The discovering is fairly sturdy,” she mentioned. “It’s not like large, large variations, however there are variations.”
Alarming Errors
VanBibber was admitted to Embody’ Huntington hospital in 2021 for remedy to strengthen her lungs. On the time, the hospital was present process a $3 million enlargement, and state regulators had warned the corporate that areas of the hospital occupied by sufferers needed to be remoted from the development “utilizing hermetic boundaries,” in keeping with a well being inspection report.
In her room, which was about 66 toes from the development zone, she started having hassle respiration, the report mentioned. When she advised the employees, they ignored her and shut her door, in keeping with a lawsuit introduced by her property. Workers members ultimately observed that she was “torpid and gasping for air,” and referred to as 911.
When the emergency medical squad arrived, the carbon monoxide detectors they wore sounded. By that point, VanBibber’s blood oxygen ranges have been dangerously low, the inspection report mentioned. She died three days later from respiratory failure and carbon monoxide poisoning, in keeping with the inspection report and the lawsuit. A plumber had been utilizing a gas-powered noticed within the development space, however there have been no carbon monoxide detectors within the hallways, the report mentioned.
In courtroom papers, Embody and its development contractors denied negligence for VanBibber’s demise. The case is pending.
Inspectors decided Embody failed to keep up a protected surroundings for all sufferers throughout development and didn’t correctly consider different sufferers for indicators of poisoning, the report mentioned.
Since 2021, the federal Facilities for Medicare and Medicaid Companies, or CMS, which oversees well being inspections, has discovered that 10 Embody hospitals, together with the one which cared for VanBibber, had quick jeopardy violations, federal data present. Such violations — like those that Medicare additionally present in reference to the deaths of Roufs and the affected person who fell after leaving his mattress — imply a hospital’s failure to adjust to federal guidelines has put sufferers in danger for critical damage, critical hurt, critical impairment, or demise.
Darby, the final counsel for Embody, mentioned the corporate regretted any medical issues and had promptly addressed all such findings to the satisfaction of inspectors. He mentioned Embody that has an “glorious compliance file,” together with superior outcomes from its accreditation company, and that its general variety of well being citations was tiny given what number of hospitals Embody owns and what number of sufferers it treats.
Six different corporate-operated for-profit hospitals have been additionally cited, whereas not one of the 31 stand-alone nonprofit rehab hospitals acquired such violations from 2021 to 2024. (Inspection reviews for normal hospitals don’t systematically specify through which a part of the constructing a violation occurred, so rehab unit violations can’t be recognized.)
An alert referred to as a mattress alarm was on the root of quick jeopardies at Embody hospitals in Morgantown, West Virginia, and Jackson, Tennessee. The gadgets are pressure- and motion-sensitive and emit a sound and show a lightweight to alert employees members that somebody at a excessive danger of falls has left his or her mattress.
In its Morgantown hospital, a nurse technician found a affected person face down on the ground with a big gash on her head after a faulty alarm didn’t go off, an inspection report mentioned. After she died, the nurse advised inspectors: “We’re having a number of issues with the mattress alarms.”
Medicare shouldn’t be approved by legislation to fantastic rehab hospitals for security rule violations, even ones involving deaths uncovered throughout inspections, because it has executed with almost 8,000 nursing properties over the last three years, imposing common fines of about $28,000.
The one choice is to completely reduce off a rehab hospital’s reimbursement for all providers by Medicare and Medicaid, which cowl most sufferers. That step would probably put it out of enterprise and is sort of by no means used due to its draconian penalties.
“Termination is often a final resort after working with the supplier to come back again into compliance,” Catherine Howden, a CMS spokesperson, mentioned in an e-mail.
In consequence, as a result of there’s no graduated penalty, even essentially the most critical — and uncommon — quick jeopardy violations successfully carry no punishments as long as the hospital places steps in place to avert future issues.
“Solely having a nuclear weapon has actually harm affected person security,” mentioned Michael Millenson, a medical high quality advocate.
One quick jeopardy incident did lead to a punishment, however solely as a result of the hospital was in California, which permits its well being division to concern penalties. Embody’ Bakersfield hospital paid a $75,000 fantastic final yr for failing to regulate the blood sugar of a affected person who died after her coronary heart stopped.
Speedy Progress and a Troubled Historical past
Embody has accelerated its enlargement lately and now operates in 38 states and Puerto Rico. It plans to open 17 extra hospitals in Arizona, Connecticut, Florida, Georgia, Maine, Pennsylvania, South Carolina, Texas, and Utah by the tip of 2027, in keeping with its newest report.
It regularly strikes into new markets by persuading native nonprofit hospitals to shutter their rehab models in trade for an fairness stake in a newly constructed Embody hospital, firm executives have advised buyers.
The president of Embody, Mark Tarr, calls it a “win-win proposition”: The native hospitals can use their emptied area for a extra profitable line of service and Embody will get a “bounce begin” into a brand new market, with companion hospitals typically referring sufferers.
Tarr, who was paid $9.3 million in compensation final yr, advised buyers that Embody requires that the prevailing hospitals signal a noncompete deal. Sixty-seven Embody hospitals are joint ventures, largely with nonprofit hospitals as buyers, in keeping with the corporate’s June monetary submitting, the newest accessible.
Darby mentioned the corporate’s earnings enable it to construct hospitals in areas that lack intensive inpatient rehabilitation and enhance present hospitals. “Excessive-quality affected person care shouldn’t be solely in keeping with shareholder return, however high quality and shareholder return are in actual fact essential to at least one one other,” he mentioned.
The success of Embody is especially notable provided that it barely survived what specialists mentioned was one of many largest fashionable accounting scandals in 2003.
The Securities and Trade Fee charged that the corporate, then often called HealthSouth, overstated earnings by $2.7 billion to satisfy Wall Road analyst quarterly expectations, resulting in the ouster of its founder and administrators. In 2004, the corporate agreed to pay the federal government $325 million to settle Medicare fraud allegations with out admitting wrongdoing. Darby credited the corporate’s new leaders for acquiring a $2.9 billion judgment on behalf of shareholders in opposition to the corporate’s founder.
The corporate modified its identify to Embody in 2018 after buying Embody House Well being and Hospice. In 2019, the Justice Division introduced the corporate had agreed to pay $48 million to settle whistleblower lawsuit claims that it misdiagnosed sufferers to get larger Medicare reimbursements, and admitted sufferers who have been too sick to profit from remedy. The corporate denied any wrongdoing, blaming unbiased physicians who labored at its hospitals. Darby mentioned Embody settled the case solely to “keep away from extra years of expense and disruption.” He mentioned the Justice Division by no means filed a lawsuit regardless of years of investigation.
Remedy Harms
Rehab hospital inspection reviews should not posted on Care Examine, Medicare’s on-line search device for shoppers. KFF Well being Information needed to sue CMS below the Freedom of Data Act to acquire all its inspection reviews for rehab hospitals. In distinction, Care Examine publishes all nursing residence inspection reviews and assigns every facility a star score for its adherence to well being and security guidelines.
So folks now selecting a rehab hospital wouldn’t know that on the Embody hospital in Sioux Falls, South Dakota, in 2021, a nurse by chance gave Roufs a blood strain drug referred to as hydralazine as a substitute of hydroxyzine, his prescribed anti-anxiety remedy, in keeping with an inspection report. Roufs went into cardiac arrest. Any such error, referred to as a “look-alike/sound-alike,” is one hospitals and employees members are presupposed to be particularly alert to.
Months earlier than, an inner security committee had recognized a pattern of remedy errors, together with when a nurse by chance gave a affected person 10 instances the prescribed quantity of insulin, sending him to the hospital, the inspection report mentioned. The nurse had misinterpret 4 models as 40. Since Roufs’s demise, inspectors have faulted the hospital six instances for numerous lapses, most lately in April 2024 for improper wound care.
An Embody hospital in Texarkana, Texas, misused antipsychotic drugs to pacify sufferers, leading to a right away jeopardy discovering from CMS, the report mentioned. And the corporate’s hospital in Erie, Pennsylvania, was issued a right away jeopardy violation for not maintaining monitor of remedy orders in 2023, when a affected person had a cardiac arrest after not receiving all of his medicine, in keeping with the inspection report.
The federal authorities’s general high quality oversight efforts are restricted. Medicare docks fee to rehab amenities for sufferers readmitted to a normal hospital throughout shorter-than-average rehab stays, however in contrast to at normal hospitals, there are not any monetary penalties when lately discharged rehab sufferers are hospitalized for essential well being points.
The Biden administration introduced final yr it supposed to develop a score scale of 1 to five stars for rehab amenities. The trade’s commerce affiliation, the American Medical Rehabilitation Suppliers Affiliation, requested a delay within the creation of star rankings till the present high quality measures have been refined. The Trump administration has not decided whether or not it’ll proceed the trouble to price rehab amenities, in keeping with a CMS spokesperson.
Lethal Bedsores
The household of Paul Webb Jr., 74, claimed in a lawsuit that the Embody hospital in Erie left Webb unattended in a wheelchair for hours at a time, placing strain on his tailbone, in 2021. His medical data, offered to reporters by the household, record a sitting tolerance of 1 hour.
Webb — who had been initially hospitalized after a mind bleed, a sort of stroke — developed pores and skin injury often called a strain sore, or bedsore, on his backside, the lawsuit mentioned. The swimsuit mentioned the sore worsened after he was despatched to a nursing residence, which the household can also be suing, then residence, and he died later that yr. In his remaining weeks, Webb was unable to face, sit, or transfer a lot due to the damage, the lawsuit mentioned.
In courtroom papers, Embody and the nursing residence denied negligence, as Embody has in another pending and closed lawsuits that accused it of failing to stop strain sores as a result of nurses and aides didn’t commonly reposition sufferers, or discover and deal with rising sores. Darby mentioned Webb’s demise occurred three months after his Embody keep and was not associated to his care at Embody. He mentioned no hospital with long-term sufferers may stop each new or worsening strain sore, however that Embody’ charges have been much like the 1% nationwide common.
Certainly one of Webb’s sons, Darel Webb, recalled a warning given to the household as they left an appointment their father had with wound specialists: A physician introduced up Christopher Reeve, the actor who performed Superman in motion pictures within the Nineteen Seventies and Eighties.
“He goes, ‘Keep in mind, Superman was paralyzed from falling off the horse, however he died from a bedsore,’” he mentioned.
Jordan Rau has been writing about hospital security since 2008. Irena Hwang is a New York Occasions knowledge reporter who makes use of computational instruments to uncover hidden tales and illuminate the information.
METHODOLOGY
To look at the medical rehabilitation hospital trade, we obtained and analyzed a database of inspection reviews of freestanding rehabilitation hospitals from the federal Facilities for Medicare & Medicaid Companies, or CMS. We additionally obtained inspection reviews from a number of states by way of public data requests.
We analyzed inpatient rehabilitation facility traits and affected person quantity knowledge contained in hospital knowledge information from the Rand Corp., a nonprofit analysis group. This dataset compiles value reviews all hospitals submit annually to CMS. For every facility for the years 2012 to 2023, we categorized annual discharges by facility sort (freestanding rehabilitation hospital or unit inside an acute care hospital); facility possession standing (for-profit, nonprofit, or authorities); and which hospitals have been owned by Embody Well being below its present or prior identify, HealthSouth.
Monetary details about Embody Well being was obtained from the corporate’s Securities and Trade Fee disclosure filings.
We examined the readmission charges for all inpatient rehabilitation amenities that CMS publishes in its high quality knowledge. CMS evaluates the frequency with which Medicare sufferers have been readmitted for doubtlessly preventable causes to an acute care hospital throughout their rehab keep. Individually, CMS additionally evaluates the frequency of doubtless preventable readmissions to an acute care hospital inside 30 days of discharge from rehab. We additionally examined the speed of profitable return to residence or group. Figures for all three metrics have been accessible for about 1,100 of the roughly 1,200 rehab amenities within the CMS knowledge. The newest readmission knowledge coated Medicare discharges from October 2021 by way of September 2023.
We examined nursing residence penalties from the final three years from CMS’ knowledge on nursing properties.
