HMN 2025: How Even grave errors at rehab hospitals go unpenalized and undisclosed, evaluation finds

Rehab hospitals that assist individuals recuperate from main surgical procedures and accidents have develop into a extremely profitable slice of the well being care enterprise. But federal knowledge and inspection stories present that some run by the dominant firm, Encompass Health Corp., and different for-profit companies have had uncommon however critical incidents of affected person hurt and carry out beneath common on two key security measures tracked by Medicare.

Yet even when inspections reveal grave instances of damage, federal well being officers don’t inform customers or impose fines the way in which they do for nursing houses. And Medicare does not present easy-to-understand five-star scores because it does for normal hospitals.

In essentially the most critical issues documented by regulators, rehab hospital errors concerned affected person deaths.

In Encompass Health’s hospital in Huntington, West Virginia, Elizabeth VanBibber, 73, was fatally poisoned by a carbon monoxide leak throughout building on the facility.

At its hospital in Jackson, Tennessee, a affected person, 68, was discovered useless in a single day, mendacity on the ground in a “pool of blood” after an alarm that was purported to alert nurses that he had gotten off the bed had been turned off.

In its hospital in Sioux Falls, South Dakota, a nurse gave Frederick Roufs, 73, the mistaken drug, considered one of 26 medicine errors the hospital revamped six months. He died two days later at one other hospital.

“I can nonetheless see Fred laying within the mattress as they shut every little machine off,” mentioned his widow, Susan Roufs. “They clicked 4 of them, after which the love of my life was gone.”

Encompass, which owns 168 hospitals and admitted 248,000 sufferers final yr, has led the transformation of this area of interest business. In 2023, stand-alone for-profit medical rehabilitation hospitals overtook nonprofits because the locations where nearly all of annual affected person admissions happen, a KFF Health News and New York Times evaluation discovered. A 3rd of all admissions had been to Encompass hospitals. Such amenities are required to offer three hours of remedy a day, 5 days every week.

Across the nation, there at the moment are practically 400 stand-alone rehab hospitals, the majority of that are for-profit. These hospitals collectively generate earnings of 10%, greater than normal hospitals, which earn about 6%, and way over expert nursing houses, which make lower than 0.5%, in accordance with the latest knowledge from the Medicare Payment Advisory Commission, an unbiased congressional company.

At the identical time, the variety of small, specialised models inside acute care hospitals—where most rehab was supplied—has dwindled. There at the moment are round 800 of these, and most are nonprofits.

In its newest annual report, Encompass, which is publicly traded, reported an 11% internet revenue in 2024, incomes $597 million final yr on revenues of $5.4 billion.

Federal knowledge on the efficiency of about 1,100 of the rehab amenities present Encompass tends to be higher at serving to most sufferers return house and stay there. In a two-year interval ending in September 2023, Medicare rated 233 rehab amenities as performing higher than the national charge for this main metric, known as “discharge to neighborhood.” Most rehabs with higher neighborhood discharge charges are for-profit, and Encompass owns 79 of them.

But knowledge from Medicare additionally reveals Encompass owns lots of the rehabs with worse charges of probably preventable, unplanned readmissions to normal hospitals. Medicare evaluates how typically sufferers are rehospitalized for situations that may have been averted with correct care, together with infections, bedsores, dehydration, and kidney failures.

Encompass accounts for about one in seven rehab amenities nationally, however owned 34 of the 41 inpatient rehab amenities that Medicare rated as having statistically considerably worse charges of probably preventable readmissions for discharged sufferers. (Overall, charges of readmission after discharge ranged from 7% to 12%, with a median of 9%.)

And it owned 28 of the 87 rehab amenities—65 of which had been for-profit—that had worse charges of probably preventable readmissions to normal hospitals throughout affected person stays. (The median for these sorts of readmissions was 5%, and charges for particular person rehabs ranged from 3% to 9%.)

Patrick Darby, the chief vice chairman and normal counsel of Encompass, strongly defended the corporate’s report in written responses to questions. He dismissed Medicare’s readmissions scores of “higher,” “worse,” and “no totally different than the national charge” as “a crude scoring measure” and mentioned “efficiency is so related throughout the board.” He known as the violations discovered throughout well being inspections “uncommon occurrences” that “don’t help an inference of widespread high quality issues.”

“The easiest and most correct cause for EHC’s success is that our hospitals present superior care to sufferers,” he mentioned, referring to Encompass by its company initials.

Chih-Ying Li, an affiliate professor of occupational remedy on the University of Texas Medical Branch at Galveston School of Health Professions, mentioned in an interview {that a} analysis study she carried out discovered the revenue standing of a rehab facility was the one attribute related to greater unplanned readmissions.

“The discovering is fairly sturdy,” she mentioned. “It’s not like large, large variations, however there are variations.”

Alarming errors

VanBibber was admitted to Encompass’ Huntington hospital in 2021 for remedy to strengthen her lungs. At the time, the hospital was present process a $3 million growth, and state regulators had warned the corporate that areas of the hospital occupied by sufferers needed to be remoted from the development “utilizing hermetic obstacles,” in accordance with a well being inspection report.

In her room, which was about 66 toes from the development zone, she started having hassle respiration, the report mentioned. When she informed the employees, they ignored her and shut her door, in accordance with a lawsuit introduced by her property. Staff members finally seen that she was “torpid and gasping for air,” and known as 911.

When the emergency medical squad arrived, the carbon monoxide detectors they wore sounded. By that point, VanBibber’s blood oxygen ranges had been dangerously low, the inspection report mentioned. She died three days later from respiratory failure and carbon monoxide poisoning, in accordance with the inspection report and the lawsuit. A plumber had been utilizing a gas-powered noticed within the building space, however there have been no carbon monoxide detectors within the hallways, the report mentioned.

In courtroom papers, Encompass and its building contractors denied negligence for VanBibber’s loss of life. The case is pending.

Inspectors decided Encompass failed to keep up a protected setting for all sufferers throughout building and did not correctly consider different sufferers for indicators of poisoning, the report mentioned.

Since 2021, the federal Centers for Medicare and Medicaid Services, or CMS, which oversees well being inspections, has discovered that 10 Encompass hospitals, together with the one which cared for VanBibber, had speedy jeopardy violations, federal information present.

Such violations—like those that Medicare additionally present in reference to the deaths of Roufs and the affected person who fell after leaving his mattress—imply a hospital’s failure to adjust to federal guidelines has put sufferers in danger for critical damage, critical hurt, critical impairment, or loss of life.

Darby, the overall counsel for Encompass, mentioned the corporate regretted any medical issues and had promptly addressed all such findings to the satisfaction of inspectors. He mentioned Encompass has an “wonderful compliance report,” together with superior outcomes from its accreditation company, and that its general variety of well being citations was tiny given what number of hospitals Encompass owns and what number of sufferers it treats.

Six different corporate-operated for-profit hospitals had been additionally cited, whereas not one of the 31 stand-alone nonprofit rehab hospitals obtained such violations from 2021 to 2024. (Inspection stories for normal hospitals don’t systematically specify wherein a part of the constructing a violation occurred, so rehab unit violations can’t be recognized.)

An alert known as a mattress alarm was on the root of speedy jeopardies at Encompass hospitals in Morgantown, West Virginia, and Jackson, Tennessee. The units are pressure- and motion-sensitive and emit a sound and show a lightweight to alert employees members that somebody at a excessive threat of falls has left his or her mattress.

In its Morgantown hospital, a nurse technician found a affected person face down on the ground with a big gash on her head after a faulty alarm didn’t go off, an inspection report mentioned. After she died, the nurse informed inspectors: “We are having a whole lot of issues with the mattress alarms.”

Medicare just isn’t licensed by legislation to effective rehab hospitals for security rule violations, even ones involving deaths uncovered throughout inspections, because it has achieved with practically 8,000 nursing houses over the last three years, imposing common fines of about $28,000.

The solely choice is to thoroughly lower off a rehab hospital’s reimbursement for all providers by Medicare and Medicaid, which cowl most sufferers. That step would most probably put it out of enterprise and is sort of by no means used due to its draconian penalties.

“Termination is often a final resort after working with the supplier to come back again into compliance,” Catherine Howden, a CMS spokesperson, mentioned in an electronic mail.

As a outcome, as a result of there is no graduated penalty, even essentially the most critical—and uncommon—speedy jeopardy violations successfully carry no punishments as long as the hospital places steps in place to avert future issues.

“Only having a nuclear weapon has actually harm affected person security,” mentioned Michael Millenson, a medical high quality advocate.

One speedy jeopardy incident did lead to a punishment, however solely as a result of the hospital was in California, which permits its well being division to subject penalties. Encompass’ Bakersfield hospital paid a $75,000 effective final yr for failing to regulate the blood sugar of a affected person who died after her coronary heart stopped.

Rapid development and a troubled historical past

Encompass has accelerated its growth lately and now operates in 38 states and Puerto Rico. It plans to open 17 extra hospitals in Arizona, Connecticut, Florida, Georgia, Maine, Pennsylvania, South Carolina, Texas, and Utah by the tip of 2027, in accordance with its newest report.

It continuously strikes into new markets by persuading native nonprofit hospitals to shutter their rehab models in alternate for an fairness stake in a newly constructed Encompass hospital, firm executives have informed traders.

The president of Encompass, Mark Tarr, calls it a “win-win proposition”: The native hospitals can use their emptied area for a extra profitable line of service and Encompass will get a “leap begin” into a brand new market, with accomplice hospitals typically referring sufferers.

Tarr, who was paid $9.3 million in compensation final yr, informed traders that Encompass requires that the prevailing hospitals {sign} a noncompete deal. Sixty-seven Encompass hospitals are joint ventures, largely with nonprofit hospitals as traders, in accordance with the corporate’s June monetary submitting, the latest out there.

Darby mentioned the corporate’s earnings permit it to construct hospitals in areas that lack intensive inpatient rehabilitation and enhance current hospitals. “High-quality affected person care just isn’t solely in keeping with shareholder return, however high quality and shareholder return are actually crucial to at least one one other,” he mentioned.

The success of Encompass is especially notable on condition that it barely survived what consultants mentioned was one of many largest trendy accounting scandals in 2003.

The Securities and Exchange Commission charged that the corporate, then referred to as HealthSouth, overstated earnings by $2.7 billion to satisfy Wall Street analyst quarterly expectations, resulting in the ouster of its founder and administrators.

In 2004, the corporate agreed to pay the federal government $325 million to settle Medicare fraud allegations with out admitting wrongdoing. Darby credited the corporate’s new leaders for acquiring a $2.9 billion judgment on behalf of shareholders in opposition to the corporate’s founder.

The firm modified its identify to Encompass in 2018 after buying Encompass Home Health and Hospice. In 2019, the Justice Department introduced the corporate had agreed to pay$48 million to settle whistleblower lawsuit claims that it misdiagnosed sufferers to get greater Medicare reimbursements, and admitted sufferers who had been too sick to learn from remedy.

The firm denied any wrongdoing, blaming unbiased physicians who labored at its hospitals. Darby mentioned Encompass settled the case solely to “keep away from extra years of expense and disruption.” He mentioned the Justice Department by no means filed a lawsuit regardless of years of investigation.

Medication harms

Rehab hospital inspection stories are usually not posted on Care Compare, Medicare’s on-line search software for customers. KFF Health News needed to sue CMS underneath the Freedom of Information Act to acquire all its inspection stories for rehab hospitals. In contrast, Care Compare publishes all nursing house inspection stories and assigns every facility a star score for its adherence to well being and security guidelines.

So individuals now selecting a rehab hospital wouldn’t know that on the Encompass hospital in Sioux Falls, South Dakota, in 2021, a nurse unintentionally gave Roufs a blood stress drug known as hydralazine as a substitute of hydroxyzine, his prescribed anti-anxiety medicine, in accordance with an inspection report. Roufs went into cardiac arrest. This sort of error, known as a”look-alike/sound-alike,” is one hospitals and employees members are purported to be particularly alert to.

Months earlier than, an inside security committee had recognized a development of medicine errors, together with when a nurse unintentionally gave a affected person 10 occasions the prescribed quantity of insulin, sending him to the hospital, the inspection report mentioned. The nurse had misinterpret 4 models as 40. Since Roufs’s loss of life, inspectors have faulted the hospital six occasions for varied lapses, most not too long ago in April 2024 for improper wound care.

An Encompass hospital in Texarkana, Texas, misused antipsychotic drugs to pacify sufferers, leading to an instantaneous jeopardy discovering from CMS, the report mentioned. And the corporate’s hospital in Erie, Pennsylvania, was issued an instantaneous jeopardy violation for not preserving monitor of medicine orders in 2023, when a affected person had a cardiac arrest after not receiving all of his medicine, in accordance with the inspection report.

The federal authorities’s general high quality oversight efforts are restricted. Medicare docks cost to rehab amenities for sufferers readmitted to a normal hospital throughout shorter-than-average rehab stays, however not like at normal hospitals, there are not any monetary penalties when not too long ago discharged rehab sufferers are hospitalized for crucial well being points.

The Biden administration introduced final yr it meant to develop a score scale of 1 to five stars for rehab amenities. The business’s commerce affiliation, the American Medical Rehabilitation Providers Association, requested a delay within the creation of star scores till the present high quality measures had been refined.

The Trump administration has not decided whether or not it’s going to proceed the trouble to charge rehab amenities, in accordance with a CMS spokesperson.

Deadly bedsores

The household of Paul Webb Jr., 74, claimed in a lawsuit that the Encompass hospital in Erie left Webb unattended in a wheelchair for hours at a time, placing stress on his tailbone, in 2021. His medical information, supplied to reporters by the household, record a sitting tolerance of 1 hour.

Webb—who had been initially hospitalized after a mind bleed, a kind of stroke—developed pores and skin harm referred to as a stress sore, or bedsore, on his backside, the lawsuit mentioned. The swimsuit mentioned the sore worsened after he was despatched to a nursing house, which the household can be suing, then house, and he died later that yr. In his remaining weeks, Webb was unable to face, sit, or transfer a lot due to the damage, the lawsuit mentioned.

In courtroom papers, Encompass and the nursing house denied negligence, as Encompass has in another pending and closed lawsuits that accused it of failing to forestall stress sores as a result of nurses and aides didn’t repeatedly reposition sufferers, or discover and deal with rising sores. Darby mentioned Webb’s loss of life occurred three months after his Encompass keep and was not associated to his care at Encompass. He mentioned no hospital with long-term sufferers might stop each new or worsening stress sore, however that Encompass’ charges had been just like the 1% national common.

One of Webb’s sons, Darel Webb, recalled a warning given to the household as they left an appointment their father had with wound specialists: A physician introduced up Christopher Reeve, the actor who performed Superman in films within the Nineteen Seventies and Nineteen Eighties.

“He goes, “Remember, Superman was paralyzed from falling off the horse, however he died from a bedsore,'” he mentioned.

2025 KFF Health News. Distributed by Tribune Content Agency, LLC.