A top U.S. lawmaker on Wednesday intensified her fiery attacks on beleaguered Genesis HealthCare’s issuance of a hefty bonus to a departing long-time CEO, even as the company was flailing amid the devastation of COVID-19 conditions.

Genesis leadership has firmly rebutted all claims of impropriety.

In addition to the attacks on Genesis, Sen. Elizabeth Warren also announced plans to launch an investigation into for-profit nursing homes in general, including those run by private equity firms. 

“The next time there’s a pandemic, seniors shouldn’t be stuck in subpar institutions run by greedy CEOs and vulture firms in order to make a quick buck,” she said. “Congress needs to act, now, before tragedy strikes again.” 

A $5.2 million retention bonus paid to former Genesis HealthCare CEO George Hager months before he retired was not funded with federal coronavirus relief funding, according to the major post-acute care operator. 

Genesis made the rebuttal statement in a February response letter to Sen. Elizabeth Warren (D-MA), who released the document on Tuesday. Warren has been highly critical of the nursing home chain, which has struggled financially since before the pandemic. The company’s letter came days after Warren’s initial note that called on Genesis to answer for the retention payment while reporting “dire financial conditions.” 

Genesis in its response explained that while it received about $417 million in state and federal grants and $248 million in loans or advances, it’s also incurred more than $460 million in COVID-related expenses and lost revenue. 

The company also noted that as a condition of receiving federal relief funding, it’s required to use the funds to pay for expenses and the impact of lost revenue attributable to the pandemic, and it will be subject to “mandatory, independent audit of such expenses and lost revenue.” 

“To be very clear: The law does not consider executive compensation a COVID-19-related expense and Genesis will not include any executive compensation in expenses allocated for purposes of the CARES Act allocation and accounting process,” the company wrote.  

Genesis also noted it has awarded more than $100 million in hero pay to nearly 30,000 employees and contract staff. The operator also cited an Avalere Health study that found that despite 45% of Genesis’ beds being in states that were among the earliest and hardest hit during the pandemic (PA, NJ, CT, MA and MD), Genesis had lower average case and death rates than other centers in the same counties. 

“In sum, while it is true that Genesis was hard hit by the pandemic, with tragic loss of life, the company is proud of the heroic efforts of its staff and the enormous efforts made, at great expense, to keep residents and employees safe. The suggestion that the company’s efforts to retain personnel, as it faced unprecedented public health and financial circumstances, somehow compromised its commitment to patient safety is deeply unfair, as is the claim that it used CARES Act funds to pay executive bonuses, which it did not,” the company argued. 

Rage returns

Warren, on Tuesday in a follow-up response to Genesis, called for more details on the retention payment and questioned its recently announced three-part restructuring plan in order to improve the company’s financial and operational stability damaged by the pandemic.

Part of the plan included voluntarily delisting itself from the New York Stock Exchange due to anemic financial valuations.

“It appears that Mr. Hager walked away with an extraordinarily rich compensation package, leaving behind thousands of dead and sick nursing home residents and staff and a company in financial ruin despite being bailed out by hundreds of millions of dollars in taxpayer funds. Your residents, your shareholders, and the American public deserve an explanation for this greed and the tragedy that preceded it,” she wrote. 

Genesis in a media statement issued Wednesday said the company’s compensation for its executives was “contractual, fair and appropriate.” 

“These kinds of retention agreements are often a necessary step companies take to avoid the loss of critical personnel in a crisis situation when stability is paramount,” Genesis wrote.

“Mr. Hager’s separation payment reflected his strong leadership and tireless commitment to protecting the company’s residents, patients and staff while simultaneously navigating Genesis through challenging financial pressures.”