DES MOINES — An operator of nursing homes in southwest Iowa owes the state hundreds of thousands in Medicaid dollars, and a receiver should be appointed to ensure the government gets the money, state lawyers said Wednesday.
Faith Ridge Life Center of Malvern and Kevington Lane of Sidney are “two very troubled nursing Medicaid providers that have simply failed to demonstrate any fiscal accountability to the state,” argued Timothy Vavricek, an assistant state attorney general, during a hearing in Polk County District Court.
Iowa has suspended payment of Medicaid funds to the facilities, which are owned by Mary Morse-Bolton of Plattsmouth, Neb.
Morse-Bolton attended Wednesday's hearing, but she declined to comment at length. She said her clients were well taken care of and pointed out that Iowa's denial of Medicaid funds hurts the clients.
“That's what breaks my heart,” she said. “They won't take care of my people.”
The state also is asking Morse-Bolton and her two businesses to disclose their assets and liabilities, and it is requesting an injunction that would keep her and the facilities from using those assets until the state can get the money it says is due.
The hearing resumes today at the Polk County Courthouse in Des Moines.
Faith Ridge is a 51-bed nursing home, and Kevington Lane is a 21-bed residential care facility, serving people who need a lower level of care than a nursing home.
According to court documents, Faith Ridge is required to pay a health care tax known as the quality assurance assessment fee.
But for two years, the state says, Faith Ridge didn't pay the tax, resulting in an estimated debt of $287,000 by 2013. In November, Morse-Bolton paid $50,000 toward the debt but she has not made any additional payments.
Kevington Lane and Morse-Bolton also owe the Iowa Department of Human Services $165,315 for overpayment of Medicaid funds, the state claims.
In September, Faith Ridge and Kevington Lane entered into a settlement with the state and agreed to retain an independent third-party management firm to oversee the finances and delivery of health care services.
Morse-Bolton chose Klaasmeyer & Associates of Omaha, which specializes in nursing home administration.
But Kenneth Klaasmeyer of the company testified that it stopped working with the Morse-Bolton businesses in November after not being paid for some of its services.
The state also raised questions about the quality of care the facilities are providing.
Elizabeth Matney, a Medicaid quality assurance manager for the state, testified that she interviewed a man, identified only as “RM,” who said he had been dissatisfied with the services offered at Faith Ridge.
He later found an apartment in Shenandoah to live in. But he told Matney he was forced to stay in a hotel for a time after Morse-Bolton told him he could not return to the nursing home to get his property if he left Faith Ridge, Matney said.
Morse-Bolton's attorneys argued the state was creating more of a problem by cutting off Medicaid funds.
“How can they pay a receiver to manage their operation if they cut off ... the spigot?” asked one of the attorneys, Mark Walz of West Des Moines. “They need to be paid.”
Walz also said allegations of poor treatment had no role in a case that essentially involved financial matters, but he was overruled by District Judge Mary Pat Gunderson.
Robert Dick of Omaha, an accountant who worked with Morse-Bolton, testified that he had tried to help her with paperwork but found himself stymied by the state.
He said when he filed a Medicaid cost report, the state sent it back with adjustments, some of which did not make sense, such as disallowing costs.
“It might be appropriate here in the state of Iowa, but in other states it's not the appropriate procedure,” he said.
Morse-Bolton did not testify Wednesday.
Her husband, John Bolton, who is not involved in the management of the facilities, described the state's move as a “big government” and “heavy-handed” attempt to put a small company out of business.
The clients sometimes react “violently” when told they may have to move out of the homes, he said.
“No one else in the world cares about these poor people,” Bolton said. “They feel very comfortable in the facility.”