State suspends 4 NJ nursing facilities from Medicaid after parent company’s guilty plea

The owners of four skilled nursing facilities in North Jersey will be suspended from New Jersey Medicaid starting in May following a guilty plea by parent company KBWB Operations and its former CEO Kevin Breslin to federal health care fraud and tax conspiracy charges in January, the Office of the State Comptroller stated Monday.

In January, KBWB Operations LLC and Breslin of KBWB-Atrium pleaded guilty to health care fraud and tax conspiracy in an alleged scheme to divert millions of dollars in Medicaid and Medicare funds away from nursing facilities in Wisconsin for personal expenses and other purposes.

At one time, according to the state comptroller, Breslin and KBWB operated about a dozen facilities in New Jersey as well as several others in Wisconsin and Michigan.

Following this guilty plea, in a letter dated Feb. 6, the comptroller notified Little Falls-based KBWB Operations, doing business as Atrium Health and Senior Living, as well as Breslin and the other owners of KBWB Operations that, as of May 7, they and their four NJ facilities will no longer be able to provide services to Medicaid beneficiaries or receive Medicaid funds as long as KBWB-Atrium and Breslin are the owners. Aside from Breslin, other owners who received suspension notices from the OSC include William G. Burris, Jr., William G. Burris III, Mary Theresa Khawly, Elia Zois and Vincent Tufariello.

The affected facilities include the Avalon Rehab and Care Center in Wayne, Atrium Post Acute Care of Wayne, Atrium Senior Living of Park Ridge and Atrium Post Acute Care of Park Ridge.

These facilities may continue to remain in the Medicaid program if the current owners disassociate from them entirely. According to the comptroller, this means that they must either “divest ownership or the facilities are placed under the control of a receiver or other independent party so that the suspended individuals have no access to authority over Medicaid funds.”

This action marks only the latest to remove nursing home owners from Medicaid due to evidence of fraud and/or irresponsible management, according to the comptroller report. The comptroller has taken action against the owners and administrators of seven other New Jersey nursing homes over approximately the last 12 months.

For example, a December report found that the owners and operators of South Jersey Extended Care, the state’s worst-rated nursing home, improperly funneled millions of dollars of Medicaid funds into their own business and personal charities, “leaving residents to live in a dismal, understaffed, and under-resourced facility.”

“Again and again, we are seeing owners and operators of Medicaid-funded nursing homes in New Jersey engaging in massive fraud. That’s causing real harm to the vulnerable residents who rely on Medicaid. The fraud is also wasting taxpayer dollars,” said acting State Comptroller Kevin Walsh. “This is a systematic problem, and it needs to be treated as one.”

The December report made several recommendations to the Department of Human Services, the Department of Health, and the legislature to protect the integrity of Medicaid, the comptroller said.

Breslin and KBWB are scheduled to be sentenced in May, according to the comptroller. The owners of the affected facilities have a right to challenge their suspension and disqualification from Medicaid.