Saint Al’s home-health agency says Idaho wrongly let biased ex-worker try to close it

A federal judge has granted Saint Alphonsus Home Health and Hospice’s request to keep Medicare from pulling its approval after an inspection found “systemic failures.”

The Boise health care company said the inspection was “fatally flawed” and overseen by a “hopelessly conflicted and biased nurse.”

Frontier Home Health and Hospice filed a lawsuit this week on behalf of the company, which is a joint venture between Frontier and Saint Alphonsus.

The lawsuit said the company terminated employee Dennis Kelly in 2014 after finding concerns about his work. He went to work for the Idaho Department of Health and Welfare as an inspector for the Bureau of Facility Standards, where he supervised an inspection last fall that prompted Medicare to sanction the company. Medicare told the company earlier this month that it plans to cease covering Medicare patients there Monday.

During the inspection that the lawsuit says Kelly oversaw, inspectors found an unlicensed nurse and incidents where employees failed to administer drugs and treatments prescribed by patients’ physicians, among other problems.

Medicare may also levy a $1.8 million civil penalty, said the lawsuit, which calls the fine “outrageous.”

The company said it “will be destroyed” if it loses its Medicare status.

The Idaho Department of Health and Welfare declined to comment.

Kelly could not be reached for comment immediately via Facebook, and the Statesman was not immediately able to find a working phone number or email address for him.

U.S. District Judge Rudolph Contreras on March 31 granted a temporary restraining order through May 3 against the impending sanctions.

The U.S. Department of Health and Human Services on Friday responded in a court filing, calling the assertion of Kelly’s conflict of interest a “red herring.”

The Medicare division of HHS “reasonably believes the findings are accurate,” it said. The department asked the judge to deny the injunction because, among other reasons, the lawsuit was premature, having been filed before the company exhausted all its administrative appeals.

Kelly went to work at Saint Alphonsus Home Health and Hospice, or SAHHH, in Boise in 2013 and stayed for about a year, according to his LinkedIn profile, which said he now works as a hospice consultant as well as a facility surveyor for the state. He worked for home-health and hospice providers in Idaho since 2004, his profile said.

Kelly has been licensed as a nurse in Idaho since 2004.

Kelly’s position at the Saint Al’s agency was eliminated in June 2014 after the owners interviewed staff and reviewed “billing and medical-certification records,” the lawsuit said. They “immediately became concerned with [his] performance,” the lawsuit said.

The Idaho Department of Health and Welfare hired him in May 2015. Two months later, the state investigated four complaints against SAHHH. Those complaints “could only have originated from a SAHHH employee — or former employee — with administrative responsibilities,” the lawsuit said.

When SAHHH told a state inspection leader about Kelly’s history at the agency, the department disqualified him from participating.

State inspectors returned to SAHHH in September for a routine inspection. This time, Kelly was not disqualified.

“Although SAHHH was unaware of it at the time, Dennis Kelly was the supervisor of the survey team,” the lawsuit said.

In addition to his former employment, Kelly had personal and financial ties that present a conflict, the lawsuit said. Among them: His wife and stepdaughter’s husband both work for a competing agency.

Federal rules disqualify someone from inspecting a home-health agency if the person worked for that agency within the past two years or has a financial, ownership or familial relationship to the agency, the lawsuit said.

Kelly nevertheless was allowed to supervise inspections under the Bureau of Facility Standards, a branch of the Idaho Department of Health and Welfare that inspects health care facilities on behalf of the federal Centers for Medicare and Medicaid Services.

In most cases in Idaho, inspectors find some problems and give the facilities time to fix them. Facilities usually pass their follow-up inspections or off-site reviews.

If the problems are persistent or severe enough, the state may recommend that Medicare ban the facility from taking new patients until patients are no longer in danger.

Pulling a facility from Medicare entirely, as the state recommended in this case, is rare.

Health and Welfare Director Dick Armstrong “attempted to recall the survey from CMS for further review” after learning of “significant issues” with the inspection, the lawsuit said.

“There were no allegations that any patient ever experienced harm as a result of any alleged deficiency and no allegation that the deficiencies posed immediate jeopardy to patients,” the lawsuit said.

Saint Alphonsus Home Health and Hospice is a joint venture between Saint Alphonsus and Frontier Home Health and Hospice, a network of agencies in the Mountain West and Alaska.

SAHHH has been in business since 1978. It has about 65 employees and usually has about 200 home-health and 10 to 30 hospice patients at a time, the lawsuit said.

This story was originally published March 31, 2017 at 12:18 PM with the headline "Saint Al’s home-health agency says Idaho wrongly let biased ex-worker try to close it."