By 2008, their firm had secured contracts worth more than $15 million a year with all of Minnesota’s major private and public health insurers, including HealthPartners, Blue Cross and Blue Shield and UCare. At its peak, Crystal Care had 1,400 clients, 1,000 employees and offices in Fairmont, Mankato and New Prague.
Knutson and Mefford blame their company’s demise on the 2009 acquisition of another home health care agency with a large number of Russian-speaking clients.
When a Russian nurse left, she took 150 of those clients — and nearly $1.5 million in annual business — according to Knutson and Mefford. Yet the company was still stuck making payments on a $1.9 million loan they took out to fund the acquisition.
“We could and should have done stronger due diligence,” Knutson said of the acquisition. “All of us were at fault.”
But long before Crystal Care’s payroll problems surfaced, the agency and its attendants had run afoul of regulators.
The state Department of Health has cited the agency’s attendants for four separate incidents of maltreatment since 2008.
In one case, Crystal Care was found to have failed to report an allegation of emotional abuse by a caregiver, as required by law, after the employee was accused of yelling at a client in a public area. In another incident, a caregiver made $2,470 in unauthorized charges on a client’s credit card, according to state reports.
Staffing was a constant concern, say former employees.
Joan Abbott, a nurse and former case manager at Crystal Care, said she was surprised upon joining the company that she was expected to make visits to patients only once every 60 days.
Some patients, Abbott recalls, were bedridden and had just returned from surgery with open incisions, while others were recuperating from pneumonia or other life-threatening illnesses.
“In my mind, people needed more constant care,” Abbott said. “You take someone with pneumonia, and things can go downhill within days.”
By late 2012, Crystal Care was on the verge of losing one of its largest payers. Federal VA officials in Minneapolis notified the firm that they would stop making new referrals to the agency because caregivers had failed to show up without notice.
“This is of great concern to us since these vulnerable veterans have health concerns,” the Minneapolis VA wrote in an Oct. 3, 2012, letter obtained by the Star Tribune.
In interviews, Knutson and Mefford said they were unaware of Crystal Care patients going without care, and said the company worked diligently with other providers to ensure that people obtained new providers. To help prevent patients from going without care, Knutson personally took over care for more than 90 clients, making hundreds of house visits without pay in the final months before Crystal Care closed its doors.
“Perhaps there were people who went without care for a short period of time,” Knutson said. “If we missed some clients, we are very sorry about that.”
‘What are the safeguards?’
Former Crystal Care workers describe a chaotic scene last August and September, as the company spiraled toward collapse.
Home care workers were calling at all hours of the day, complaining that their paychecks were bouncing and that they were losing their cars and homes. Office employees scrambled to find replacement caregivers for patients.
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