Many long-time McKnight’s readers will remember Beechwood Restorative Care Center and its $25 million victory against the state of New York. The settlement ended a 13-year war and one of the most egregious abuses of administrative power that could be imagined.
The retaliation was perpetrated by high level state Department of Health officials who were annoyed by me and my criticism of DOH policies and survey results, criticisms the court labeled as speech protected by the First Amendment.
My facility was the victim of a scorched earth, department-wide offensive that was carried out through corrupt and fraudulent use of the survey and enforcement process. Key to the offensive was gaining the cooperation of officials with the Center for Medicare & Medicaid Services to decertify the facility, then pre-empting a federal hearing by reworking federal survey issues into state charges and using a unique state administrative hearing process to go after the facility’s operating license.
A facility that had one of the highest quality ratings in the state was decertified and closed within weeks using claims of widespread immediate jeopardy — before I had the opportunity to refute the charges in any proceeding. Patients were forced to transfer, staff lost their jobs and the facility was never allowed to reopen or be sold for nursing home use.
Why would officials even attempt this? Simply because they felt they could, and with impunity.
“A Court Without Justice: Administrative Law, The Constitution, And Me,” is my new book explaining how administrative law empowers agency officials to feel they are above the law. The system emboldens them to abuse their authority, violate constitutional rights, withhold evidence and lie to the courts. My book also explains the hindrance this body of law creates for obtaining a fair, Constitutional resolution in the courts as judges defer to agency officials, loathe claims of retaliation and impose tremendous burdens of proof on the plaintiffs.
The fact is, none of this would have happened if DOH officials had been obliged to prepare their case and send it to the attorney general’s office for presentation in the courts rather than in agency-run, quasi-judicial administrative proceedings. That demonstrates how absurd, corrupt and devoid of justice this whole process can be.
Quasi-judicial is at best, “quasi” justice. The outcome of the administrative hearings resulted in a subsequent criminal investigation for Medicare and Medicaid fraud by the AG’s office. It lasted three years and covered every aspect of Beechwood’s operations, including the issues involved in the state and federal administrative hearings that were upheld by both hearing officers.
Unexpectedly, it found that Beechwood provided “excellent care,” thus demonstrating the DOH case to be a complete fraud. However, since the AG’s office had to defend the DOH officials being sued by Beechwood for violation of its civil rights, it had a conflict of interest, and allowed this exculpatory evidence to be hidden as it pursued and originally was successful in getting dismissal of the case.
It took 12 years of intensive court battles, millions of dollars, and full-time effort on my part to obtain the necessary documentation to get Beechwood its day in court, assemble its case and force the defendants to face a jury. Hopefully, the outcome and case law resulting from this case has provided a deterrent to this level of abuse again. But problems caused by abusive regulators continue, and my book should be on the shelf of any owner or administrator potentially subject to these administrative actions.
Brook Chambery holds an MBA in finance and monetary economics and has been the CEO of companies in the healthcare and information technology sectors. He previously authored a book on healthcare finance.
