New Developments in Kentucky Nursing Home Scandal

In early October 2002, Adult Abuse Review published an article on allegations that Kentucky Governor Paul Patton had used state regulators to first benefit and then harass his former lover, Birchtree Healthcare nursing home owner Tina Conner. The controversy continued to boil over the intervening three months. What follows are some of the key developments.

• Medicare and Medicaid denied Birchtree’s bid to again become eligible for funding.

During mid-October, the Cabinet of Health Services sent an inspection team, made up of a federal surveyor and people from other regions who had not previously inspected Birchtree, back to the nursing home to see if the deficiencies that had led to Birchtree’s de-certification had been remedied. Eleven deficiencies were found, and re-certification was denied.

The most serious deficiency concerned the facility’s investigation of a large bruise that appeared on a resident’s thigh in August. According to the inspection report, “The facility failed to conduct an internal investigation that included an initial assessment of the resident with emphasis on identifying potential abuse. An alleged perpetrator was named and the facility failed to utilize procedures to protect residents while an investigation was conducted by allowing the alleged perpetrator to continuing providing direct care to residents.” Birchtree officials said they had investigated appropriately and had determined that the bruise had been received while the resident was staying in a hospital.

A letter from the Centers for Medicare and Medicaid Services (CMS) to Birchtree said, “Based on the findings of this survey, we have determined that the reasons for terminating your provider agreement have not been removed. The facility was not able to provide reasonable assurance that the reasons for termination will not recur.” A Birchtree official, however, characterized the findings as “paperwork deficiencies,” and alleged that a surveyor had altered a resident’s medical record, potentially causing a dangerous delay in the administration of a prescribed medication. Conner also apparently gave “investigators” the tape of a conversation in which a state official said she was working to “close down” the nursing home. Birchtree officials also charged, “the findings on this particular survey should be negated based on the fact that the agency did not follow the process,” by releasing a news release that said the inspection had been completed three hours before it was actually finished.

• A bankruptcy court closed Birchtree Healthcare and established an 18-month lease for the facilities by a Kentucky nursing home chain.

In December, a bankruptcy judge approved a plan for EPI Corp., owner of 23 Kentucky nursing homes, to lease the former Birchtree Healthcare facility for 18 months, with an option to buy the nursing home for $2.7 million. Birchtree had said it had a $3.2 million debt when it filed for Chapter 11 bankruptcy reorganization in September. Eight remaining residents were moved out in December, and EPI will spend two months reapplying for federal and state operating licenses.

Conner said she would contest the agreement because the lease amount was $22,794 a month, whereas she had had a verbal agreement with EPI to take a five-year lease at $35,000 a month. EPI disputes her allegation.

• Some of Conner’s lawsuit against Governor Patton and the state of Kentucky was thrown out of court in December.

In September Conner had filed a lawsuit against the Governor and the State alleging sexual harassment, defamation, wasting taxpayer money, engaging in outrageous conduct, and intentionally causing her emotional distress. In December, a judge ruled that the State should not be a defendant. He also threw out two of the charges against Patton -- sexual harassment and wasting taxpayer money -- because he ruled Conner did not have standing to bring them.

As AAR reported in October, this complicated scandal has involved several colorful characters. Further revelations in the past three months have only increased the juiciness factor.

• Dan Dabney, widely characterized in media reports as Birchtree’s “acting administrator” or “manager,” turned out to be a state employee who was on paid leave during an investigation of allegations concerning vulnerable adult abuse and managerial sexual harassment.

In late October, Dabney disputed an Executive Branch Ethics Commission opinion that it was a potential conflict of interest for Dabney to run Birchtree before he had resigned from state employment, which he did on June 17th (although accrued vacation and compensatory time kept him on the state payroll until September 15th . Although the Courier-Journal alleged that Dabney had become “associated” with Birchtree in April when Conner was looking for an administrator, Dabney said that he had been retained only as a consultant and been paid only for expenses. “The only conflict would be if I had gainful, paid employment,” he said. As of late October, he continued, he had still not collected a salary.

Dabney had had a 16-year career in state government that included working as a nursing home inspector. At the time of his resignation, he was director of a group home for mentally retarded adults. The allegations against him were of verbally abusing a resident and sexually harassing staff. Although Dabney denied the allegations and passed a polygraph test, a private investigator hired by the state said Dabney had “created a very tense, stressful and hostile work environment.” The day before his preliminary termination hearing, Dabney resigned, stating in his letter to Mary Morgan (the Health Services Secretary who, among other things, oversees nursing home inspections), “You know as well as I do that the allegations that have been brought against me for misconduct are totally false.”

• Conner has been involved in other sexual harassment and political controversies.

In 1998, Conner sought assistance from a “constituent director” in Governor Patton’s office for help filing a complaint about a state trooper, who she alleged had made sexual comments to her while investigating a complaint at the nursing home in 1996, and again in front of her family at a restaurant in 1998. The trooper was suspended. The incident was apparently reported by the Courier-Journal because of the unorthodox -- but not illegal -- way in which the complaint was registered.

The Courier-Journal also separately reported that Conner, at the request of a Democratic candidate for office, “wrote a letter two years ago accusing his Republican opponent in Western Kentucky of sexually molesting her more than 10 years earlier -- although she never formally filed a complaint about the alleged molestation at the time she said it occurred.”

• Governor Patton, Conner alleges, arranged three menage a trois sexual encounters with a female state employee, who has denied the charges.

Although Conner admitted to the paper that those were not her first experiences with a menage a trois, she maintained that “I didn’t feel like I had much of a choice” about going along with the Governor’s suggestion.

• Conner says she received calls between 1998 and 2001 tipping her off to annual inspections by the Cabinet for Health Services and the state fire marshal’s office.

Dabney confirmed that he was present when one of the warning calls came from an aide to Patton’s chief of staff. The staff member alleged to have made this particular call denied the charge. Although Dabney said, “There will be some evidence coming forward on that,” both he and Conner refused comment when asked if the telephone calls had been taped.

• State auditors reacted in outrage when they learned from media interviews Conner had given -- rather than from the Cabinet for Health Services, the focus of a recently-completed year-long audit of Medicaid finances -- that the cabinet alleges Birchtree was overpaid by $242,911.

Auditors claimed the sum should have shown up in the cabinet’s books and also should have been disclosed to them as an unpaid debt. A cabinet spokesperson admitted the payments were not properly recorded, but said the error wasn’t discovered until October 10, after the audit period. The cabinet did file a claim for the funds with the bankruptcy court. Meanwhile, it is challenging most of the audit’s findings, including charges that the cabinet’s Department of Medicaid Services has not effectively managed “accounts receivable.”