Alpharetta nursing home operator to pay $1.25 million over shoddy care

Settlement reached in federal lawsuit

The nursing home was plagued by roaches, rodents, ants and snakes. One snake was discovered after a bedridden resident complained of leg pain. When a staff member pulled back the covers to investigate, the snake jumped out at her.

In the showers, mold was widespread, and there were no curtains to provide privacy. Privacy wasn’t a priority, anyway. The staff would bring in several women to the bathroom, then undress and disrobe them in groups, to the residents’ dismay.

Those were among conditions found in 2008 and 2009 at a Mississippi nursing facility then controlled by an Alpharetta couple, court documents say. Later, residents of the home complained of not getting enough to eat. One was transferred because of bed sores and wounds left untreated. In 2011, another who transferred to a different facility had to be scrubbed clean immediately upon admission.

Now, the Georgia couple, Julie and Douglas Mittleider, along with companies and a nonprofit foundation they control, have agreed to pay $1.25 million to settle allegations that, for years, they bilked Medicare and Medicaid by providing "effectively worthless services."

The Justice Department announced the settlement earlier this month. They have four years to pay the settlement, with the first installment due next year.

The Mittleiders have operated nursing homes in several states, including Georgia, and have repeatedly faced complaints of substandard care, inadequate staffing and other violations, court records show. Massachusetts in 2009 banned the Mittleiders from owning or operating a long-term care facility in that state for 10 years. In Georgia, a 2015 class-action lawsuit — filed against Salem Nursing & Rehab Center of Augusta, Douglas Mittleider and others — said that the home quit paying for employees' health insurance but didn't tell workers and kept deducting health insurance premiums from their paychecks.

The Mittleiders could not be reached for comment. They did not respond to messages left with AltaCare Corporation, a business based in Alpharetta that’s run by Douglas Mittleider, or at an Alpharetta house. A recording at a residence listed in their names in Adairsville said that the message bank was full. No phone was listed for Julie Mittleider’s Hyperion Foundation and its address in state records is a UPS store in Alpharetta.

The Mississippi case was originally filed by Academy Health Center, which owned the Oxford Health and Rehabilitation Center and leased it in 2005 to the nonprofit Hyperion Foundation. Hyperion, in turn, entered an agreement with for-profit AltaCare Corporation, whose CEO was Douglas Mittleider, to operate the facility.

At some point, Hyperion failed to pay rent, and Academy alleged it discovered abominable conditions. Oxygen bottles, medical tubing, garbage bags and towels were rationed and reused, the suit alleged, and the facility was chronically short staffed. In its lawsuit, Academy contended that funds to pay for patient care were diverted to other entities that Douglas Mittleider controlled.

The U.S. government later joined the whistle-blower lawsuit, saying that Hyperion over medicated residents, failed to meet their nutritional needs and hired insufficient staff to care for them. Medicare and Medicaid funds paid to the home instead were diverted to other entities affiliated with the Mittleiders, leaving the Mississippi home unable to pay for food, heat, air conditioning, pest control and cleaning, the government said. Those conditions, the Justice Department alleged, caused the residents to suffer pressure ulcers, falls, dehydration and malnutrition.

The Mittleiders, Hyperion, AltaCare and related companies Long Term Care Services and Sentry Healthcare Acquirors agreed to the settlement, which was announced by the Justice Department earlier this month.

Besides Mississippi and Georgia, the Mittleiders have managed or operated more than 30 long-term care homes throughout the U.S., including in Connecticut, Wisconsin, Kansas, Tennessee, Virginia, Texas and Alabama, court records show.

They also have been defendants in numerous court actions, and some courts have noted the difficulty in assigning liability because of the “web” of companies Douglas Mittleider created.

Among the recent cases, AltaCare, Douglas Mittleider and other defendants agreed in October to settle the lawsuit by former employees of Salem Nursing & Rehab Center of Augusta. That settlement “provides the vast majority, if not all, of the relief sought,” court records say, which includes setting up a process for employees to submit medical claims that should have been covered but were not. While the former employees wanted to go to trial, attorneys noted that Salem Nursing had filed for bankruptcy, and litigation could have been complex because some defendants argued they were not responsible for benefits under the plan.

In March, the nursing home in Augusta and Douglas Mittleider settled a wrongful death lawsuit as it was heading to trial. That case involved Patrick Manning, who was taken to the home for rehabilitation after a stroke in 2011. He died 16 months later with gangrenous pressure sores, dehydration, malnutrition and a condition that caused his limbs to clutch close to his body, the Augusta Chronicle reports. The settlement amount was not revealed.

Also in March in another Georgia case — Continental Casualty Co. vs. HealthPrime, AltaCare, Mittleider and others — the defendants were found liable for $1.4 million.

That case, which involved unpaid premiums to companies that provided workers compensation, liability and auto insurance, stretched back to 2004 and was in and out of court for years. The insurers first filed a complaint in 2004 and a jury later awarded them $2.8 million, but HealthPrime failed to pay the judgment. In 2007, the insurers filed another complaint, which was settled in 2010 when the Mittleider companies agreed to pay $2 million. But after paying only about half, they stopped making payments, forcing the insurers to file a subsequent complaint.