Nursing home CEO pleads guilty to fraud, sentenced to 18 months

Wednesday, October 11, 2006

ST. LOUIS -- A St. Louis nursing home executive pleaded guilty Tuesday to conspiracy to defraud Medicare and Medicaid by collecting payments for services not provided, federal prosecutor Catherine Hanaway said.

Robert Wachter, 59, chief executive officer of American Healthcare Management Inc., will serve 18 months in prison under a plea agreement.

Wachter approved staffing limitations that caused elderly residents to suffer from dehydration, malnutrition, bed sores and other extreme conditions at three nursing homes, Hanaway said.

Cases of neglect include an 88-year-old woman who sat for hours in her own waste and had ants crawling all over her body in the weeks before she died.

Hanaway called the case the first of its kind in which a health-care CEO pleaded guilty to taking government payments for long-term care services that were not provided.

"It's a terrible case," Hanaway said.

Wachter, formerly of St. Louis, but now of Jackson, Wyo., and three St. Louis-area nursing homes managed by the company face fines totaling $750,000.

Wachter oversaw operations at Claywest House Healthcare in St. Charles, and Oak Forest North and Lutheran Healthcare in suburban St. Louis which submitted false claims to Medicare and Medicaid. All three facilities entered guilty pleas Tuesday.

Federal prosecutors said that from 1998 to 2001, Wachter determined the budget for all three nursing homes and approved dangerously low nursing staff levels, while American Healthcare billed Medicare and Medicaid -- government health insurance programs for the elderly and poor -- for services that were inadequate or not performed at all.

The case included instances of residents escaping from the facility and physical abuse by staff members, Hanaway said. One resident was beaten by an employee and later died. Photographs showed another resident with bed sores and dead tissue down to the bone.

The Missouri Department of Health and Senior Services has said that state inspectors repeatedly cited the facilities and attempted to revoke their licenses, but American Healthcare continually appealed the sanctions.

Wachter allegedly took a salary in the hundreds of thousands of dollars and cash bonuses.

"The executives of this company were taking more than $4 million in profits and not even providing for the baseline level of nursing service to take care of these patients," Hanaway said, adding that $4 million in profits was a conservative estimate.

Another associate serving under Wachter, Charles Kaiser, was prosecuted for similar charges and served a year in prison, Hanaway said.

Both Wachter and American Healthcare Management reached civil agreements last year not to engage in the management of nursing homes and to pay back nearly $500,000 to Medicare and Medicaid, Hanaway said.

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