Jerry Parson lay motionless on the bedroom floor, pain shooting through his back. The screams of his companion, Joyce, pierced the morning silence of their Bloomington apartment.
They were helpless.
A personal care attendant they had hired to move Parson from his bed to his wheelchair each day had failed to show up for work. Frantic calls to her employer, a company called Crystal Care Home Health Services, had gone unanswered.
Parson, 55, suffers from multiple sclerosis and has virtually no movement in his limbs. When Joyce tried to move him, her legs buckled and he crashed to the floor.
“I felt hurt and abandoned,’’ Parson said.
Crystal Care, one of the largest home health care companies in Minnesota, was on the brink of collapse and had stopped paying its employees. Many had quit going to work, leaving their sick and bedridden patients at home for weeks with limited or no care. Even as state officials learned of the crisis, no one alerted Parson.
The slow demise of Crystal Care, which finally shut its doors in March, reflects the grave and widespread problems that shadow the home health care industry as it grows explosively in Minnesota and across the country.
Home health care companies now deploy an army of more than 100,000 personal care assistants in Minnesota, serving thousands of frail and ailing patients. But they operate without the kind of oversight that is routinely given to licensed care facilities such as nursing homes, and their workers are often low paid and poorly trained. Despite the industry’s rapid growth, most states have no minimum training requirements for personal care attendants in their programs. Minnesota requires only that they take a 25-question, multiple-choice exam that can be completed in just a few minutes.
The industry is also wracked by instability. Of the roughly 800 companies that employed personal care assistants in Minnesota in 2009, one-third have since closed their doors, according to a state database analyzed by the Star Tribune. State records also show that more than 100 home care companies have had more than $350,000 in unpaid-wages claims in the past five years.
Yet unlike a nursing home, a home health care company is not required to secure substitute care for clients when it goes out of business. Companies can close and leave patients in suddenly dire straits — and Crystal Care is just the latest in a series of recent failures that have destabilized the lives of vulnerable and chronically ill people across the nation.
“The lack of oversight is a catastrophe,” said Dr. Robert Kane, chairman of long-term care and aging at the University Minnesota’s School of Public Health. “But the catastrophe has gone largely unnoticed because it’s happening in thousands of individual, isolated homes.”
Crystal Care’s co-founders, Sally Knutson and Jeanette Mefford, said they worked 80-hour weeks to help clients as the agency began foundering last year. Still, Knutson acknowledged that the process “was not as smooth as we wanted it to be,” and that some patients may have gone without care.
“It was a major, major loss,” said Mefford, who cried as she described the company’s demise.
Consumer advocates acknowledge that the home care industry serves a vital function, helping people live more independent lives outside of institutions and keeping them closer to their families and community. Many agencies, they say, provide first-rate care.
But they also warn that what happened with Crystal Care could happen anywhere, anytime.
Federal and state regulation is so light that “no one who is getting personal [health] care at home is really safe,’’ according to Dr. Charlene Harrington, a nursing professor at the University of California at San Francisco and a former director at the Center for Personal Assistance Services (PAS) in San Francisco.
Rapid growth, troubling signs
When Crystal Care’s finances began unraveling last year, authorities in Minnesota appeared ill-equipped to respond. Three state agencies knew that its employees were not getting paid, records show, but no single regulator notified Crystal Care’s 1,000 clients that the company was failing. A state ombudsman also declined to meet with the company’s alarmed employees.
Yet even as it faltered, Crystal Care continued receiving payments from the state. The company has been paid more than $25 million over the last decade, most of it through federal-state Medicaid grants for the poor and infirm.
The episode was symptomatic of problems that have emerged during a decade of explosive growth in the industry. In Minnesota, public spending on personal care assistants in clients’ homes has soared from $117 million in 2003 to $618 million last year, and more than 36,000 Minnesotans now receive such care. Nationally, Medicaid payments to home health care companies nearly tripled in the past decade, eclipsing $12 billion in 2011.
In the midst of that growth, billing irregularities and fraud have become chronic. Nationwide, 20 percent of all Medicaid claims submitted by personal care service providers were found to be faulty — either because providers had no record that the services were actually provided or the caregivers lacked proper qualifications, according to a 2010 survey by the U.S. Department of Health and Human Services (HHS). In a single year, wrongful payments totaled more than $700 million, the department found.
Across the country, state regulators who investigate Medicaid fraud have more than 1,000 open cases involving personal care assistance services — more than any other health service covered by Medicaid, according to a 2012 report by the HHS Office of the Inspector General.
Just last week, Michigan’s auditor general reported that the state improperly paid $160 million in a 29-month period for home care services under a state Medicaid program. The auditor blamed shoddy paperwork and poor oversight and noted that 3,786 caregivers in Michigan had felony criminal records, including convictions for homicide and sexual assault.
In 2010, Ometta Vent Care Services of Plymouth quietly shut its doors after state investigators uncovered extensive fraud, including evidence that the firm had billed the state for thousands of hours of nursing services that were never provided. Sick patients, including people on ventilators who required 24-hour care, also complained of inadequate care.
In Minnesota, personal care assistance services account for less than 10 percent of total Medicaid spending, but alleged personal care fraud accounts for 37 percent of state fraud investigators’ time, according to Minnesota’s Department of Human Services. Personal care fraud also accounts for more than half of the state attorney general’s Medicaid investigations.
“The fraud is a reflection of the extreme lack of state attention and resources devoted to this exploding industry,” said Hollis Turnham, the Midwest director of the Paraprofessional Healthcare Institute, a health care advocacy group.
‘Sitting here, rotting’
Luverne Nelson is gasping for breath, his face a mixture of pain and fatigue as he struggles to take off his pants and shirt.
Nelson, 84, suffers from chronic obstructive pulmonary disease. The mere act of undressing for a shower can cause him to collapse on his bed from exhaustion.
“Some days, I get to huffing and puffing so bad you can hear me across the street,” he said one day recently.
And that’s on good days, when Nelson has a personal care assistant to help him.
For two months last year, Nelson had no such help. One day in September, Nelson’s longtime personal care assistant at Crystal Care failed to show up at his apartment in North Branch.
Nelson, a Korean War veteran who calls himself “fiercely independent,” thought he could fend well enough on his own until another aide arrived.
Days slipped by without a caregiver showing up. Then weeks. Then months. Nelson stopped taking a shower. He stopped washing his clothes and changing his bedsheets. And he frequently forgot to take the small pink pills, kept in a plastic tray above his kitchen sink, that help prevent the buildup of fluid in his lungs.
Like other former patients, Nelson said he was afraid to call public officials for help, fearing they might discover his frail state and send him to a nursing home. His condition worsened to the point where he could barely bend down and pull on his socks without wheezing uncontrollably.
“I was just sitting here, rotting,” he said.
Desperate, he discovered the phone number of a former Chisago County social worker who used to visit him, at a time when some counties still provided personal care services.
The social worker, Patty Mattson, said she was shocked to learn that Nelson was essentially abandoned.
“He could have easily fainted or fallen and no one would have known for days,” Mattson said.
Alarms go unheard
Across much of the state, former Crystal Care clients tell similar stories of abandonment. Many asked why the state Department of Human Services, which was Crystal Care’s largest single payer, did not act sooner to protect patients.
DHS officials began to monitor Crystal Care in May of last year, after receiving a report of bounced payroll checks. However, they acknowledged, four months passed before the agency made an on-site visit to the company’s Richfield headquarters to examine its records. As part of that review, DHS discovered that Crystal Care had violated Minnesota law by overbilling the state nearly $30,000 for services that were never rendered or lacked documentation, among other violations.
Early last September, representatives from three state agencies met with Crystal Care’s owners in Richfield, where they were told the company planned to close, state officials said. In response, DHS prepared letters to Crystal Care clients with information on how to find new home care providers.
But two weeks later, Crystal Care reversed course and filed for Chapter 11 bankruptcy protection instead, enabling it to stay in business. The letters from DHS were never sent, state officials said. As a result, many Crystal Care patients had no idea the company was in distress and their care might be in jeopardy.
“The fact that [Crystal Care’s closing] dragged out for a period of time longer may have created more of a risk for clients,” said Deputy Human Services Commissioner Charles Johnson.
DHS officials said the agency did not receive any specific reports of Crystal Care patients going without care. And even if the agency had received such reports, it would not have had the authority to investigate them. Under Minnesota law, the state’s 87 counties have primary responsibility to investigate maltreatment of vulnerable adults by unlicensed persona care assistance providers. But counties investigate only complaints involving specific individuals — not companies.
“No one is actually regulating the most important player of all — the [home care] providers,” said Anne Henry, an attorney with the Minnesota Disability Law Center, a legal advocacy group.
Employees, however, did raise alarms. Last November, a Crystal Care personal care assistant, Kimberly Beguhl, wrote to the state’s ombudsman for patient care at DHS. She asked officials to meet with workers and warned of “vulnerable adults that were left without care.” The state ombudsman, Margaret Manderfeld, turned down the request, saying a group meeting might violate patient confidentiality, according to documents filed with bankruptcy court in Minneapolis.
In a report to the bankruptcy court, Manderfeld recommended against any in-person interviews with patients, asserting that “some patients would be upset by a stranger coming into his/her home for an interview.”
In a written statement to the Star Tribune, Manderfeld said her role in the case was narrow in scope. Last October, she was appointed by the bankruptcy court to monitor the quality of patient care during Crystal Care’s bankruptcy. In that role, she wrote to Crystal Care patients three times. Three patients responded, she said, but none reported concerns about their care. Manderfeld said she also wrote to Crystal Care employees but did not receive a response.
“If any patient, guardian or employee had reported any concern about patients’ care or interruption of services, I would have initiated an interview with that patient,” Manderfeld wrote.
In July 2013, the Minnesota Department of Health conducted its own review of Crystal Care, interviewing only seven patients and one family before concluding that patients were receiving adequate services, according to a state investigative report.
William Dombi, a vice president at the National Association for Home Care and Hospice, the nation’s largest trade group for home health care providers, said a case like Crystal Care reveals the need for tighter regulation to prevent more patients from being abandoned. At minimum, he argued, home health care companies should be required to make every effort to secure substitute providers and notify them in advance before closing their doors.
“This shouldn’t happen even once,” Dombi said. “There is definitely a regulatory gap here where consumers … may find themselves at risk of losing care.”
Because many home care patients suffer from serious illnesses, a breakdown in care can be more than a frightening inconvenience; it can have life-threatening consequences.
Mark and Betty Madsen of Fridley relied for several years on a personal care attendant. Mark, who is 50, suffers from severe chronic lung disease, diabetes and a spinal injury; Betty suffered from bipolar disorder and severe depression.
When a Crystal Care worker stopped coming three times a week to help the couple with basic chores, their trailer home quickly fell into disarray. Dirty dishes piled up in their kitchen sink, and dog and cat feces covered much of their carpet. In April, Betty Madsen was taken to the hospital with a leak in her colon and died several days later from complications related to the surgery.
Madsen doesn’t blame Crystal Care for her sickness and death, but he does resent that she was left without care in her final months of life. “I felt like Crystal Care just abandoned us,” he said, as he wiped his eyes with a paper towel. “Betty deserved better.”
Needs deepened, skills did not
The home health care industry has changed profoundly since its inception four decades ago.
When states introduced personal care assistance programs in the mid-1970s, the attendants focused mainly on patients who were healthy but needed help with basic activities such as bathing and cooking.
From the outset, the federal Centers for Medicare and Medicaid Services (CMS) gave states almost complete discretion in defining the scope of personal care services. The CMS sets no minimum training guidelines for the 30-plus states that offer personal care assistance programs.
This absence of rules is largely by design. Regulators crafted personal care assistance services to be easily accessible, so that sick and frail people did not have to clear numerous legal hurdles and training requirements to get help with basic chores at home.
“Personal care assistance programs were meant to be very informal,” Harrington said. “The programs were small and the standards were lax.”
But a landmark legal case caused demand for home health care to soar. In 1999, the U.S. Supreme Court ruled that keeping people unnecessarily in institutions, such as nursing homes, was discriminatory and violated the federal Americans with Disabilities Act. The ruling emboldened disability rights advocates and large senior groups such as AARP to lobby for an expansion of home care services.
Home health care went from being a social service to a civil right. And state governments, desperate to rein in swelling Medicaid costs for institutional nursing care, were eager to oblige. They began to expand and promote personal care services as a more convenient option than nursing homes, which charge on average up to eight times more than care at home.
As state personal care assistance programs mushroomed in size, so did the medical needs of patients. By the early 2000s, patients who once would have been confined to nursing homes — including quadriplegics and people with severe dementia — were being cared for in their homes by unlicensed personal attendants. Attendants were also caring for people who had just come home from the hospital with intravenous feeding bags, open surgical wounds and ventilator machines.
Federal lawmakers have for years pursued measures that would expand access to home care, but only a handful of them have focused on protecting consumers from neglect. In May 2013, Sen. Al Franken, D-Minn., reintroduced legislation that would require states to develop a bill of rights for home health care patients, as well as specific plans to enforce them.
“It’s clear to me that staying independent and at home is a top priority for [seniors],” Franken said. “But in order to keep our seniors independent, we also have to make sure they’re safe.”
A merger goes sour
Sally Knutson and Jeanette Mefford, two nurses with decades of experience, founded Crystal Care in 2001, motivated by a common belief that people deserved to live in their homes.
“It’s what we believe and it’s what we’re passionate about,” Knutson said. “Home care makes people more happy and helps them live in dignity.”
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.
Desperate to prevent an exodus of staff, Knutson started doling out cash — often in $100 bills — to caregivers who needed to pay their bills or buy gas to get to patients’ homes, former employees said.
In interviews, a number Crystal Care attendants said they worked weeks, even months, without pay but finally had to stop after draining their savings and even cashing out their 401(k) retirement accounts. “These clients were like our children,’’ said one, Jacqueline Reed of Minneapolis. “Would you abandon your own baby?”
Last September, a week before the company filed for bankruptcy, Knutson called an employee meeting at the Richfield headquarters. Abbott, the former Crystal Care nurse, said she was handed a list of 98 patients and told to call and tell them to find a new provider.
Abbott made a flurry of calls, she recalls, but many people did not pick up their phones and some did not understand English. The firm did not have a translator at the time, she said. “The [patient] outreach effort was too little and too late,” Abbott said.
In January 2014, when the company had already lost two-thirds of its clients and most of its employees, the Department of Human Services finally took action.
It notified Crystal Care that it was terminating Medicaid payments to the firm because of improper billing and other violations. The notice made no mention of patient care concerns.
“No one stepped up in this case,” said Roberta Opheim, the state ombudsman for mental health and developmental disabilities, an advocate for the mentally ill and disabled who is appointed by the governor and investigates patient complaints. “It raises a serious question: If another major home care company comes crashing down, what are the safeguards to ensure that people don’t fall through the cracks?”
Jerry Parson, the former Crystal Care client with multiple sclerosis, wonders that, too.
On a recent weekday, Parson laughed and joked as a cheerful young caregiver moved his thin arms and legs in wide circles to prevent his muscles from atrophying.
But Parson, who uses a wheelchair and spends most of his waking hours in the kitchen of his apartment, has a lot of time to think — and to worry.
“If they drop me again, they may decide I’m just too much trouble and just put me away in a nursing home,” he said. “I don’t want to spend the final years of my life staring up at a blank ceiling.”
Staff writer Glenn Howatt contributed to this report.
Chris Serres • 612-673-4308
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