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The many extracts on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of the allegations made.

Beverly and Politics


Lobbying, marketing and political donations are all very important corporate activities and vast sums of money which should be directed to the care of nursing home residents is squandered by Beverly and other corporations. They press legislators to pass legislation which favours their bottom line and reject legislation which would protect citizens rights and impact on the bottom line.

Citizens groups have produced figures which show that voting in legislative assemblies follows the dollars spent on these activities. They blame these donations and close personal relationships for the failure of regulation and oversight. They believe that this is why there has been no attempt to properly reform the health system.

Click on the item to go there.

Beverly and Politics in Arkansas

Beverly moved its headquarters to Arkansas early in the 1980's.

Politics in Arkansas was from all accounts a very murky business and it seems that Beverly soon established close relationships with government including the Clintons.

Beverly was involved in series of financial scandals surrounding the Clintons, the legal firm for whiich Hillary Clinton worked, and many government members who later accompanied Clinton to Washington. Some even became prominent in the Justice department.

Beverly had run up massive debts building a 1000 facility empire. Government had at this time also taken steps to cut down on Medicare excesses. Like Sun, IHS, Genesis and Vencor in the 1990's beverly was in trouble. It needed to sell homes and there were not many buyers.

The state of Arkansas planned to advanced US $81 million in revenue bonds through a shelf not for profit company in order to help Beverly which was in financial difficulties. It was alleged that a US $100,000 donation was offered to the attorney general to get his support. When the press started unravelling the complexities of the deal Clinton cancelled it.

The law firm for which Hillary Clinton worked profited from the deal. William H. Kennedy III, a partner in the Rose Law Firm of Little Rock and subsequently associate counsel to President Clinton, allegedly shepherded the deal for Beverly Enterprises. Critics later described a very similar deal with Beverly in Iowa involving the same people as blatant profiteering. A judge called it "unconscionable."

Before he religuished the presidency Clinton pardoned a number of past criminals with whom he had links. When we see the leniency displayed in the recent Beverly fraud settlement we can only speculate whether Beverly and the Clinton establishment were still mates following their close association in the 1980's, or whether Beverly had information which gave them influence.

Beverly seems to have had more effective political influence than IHS whose chairman was notorious for his political donations and close association with politicians including Clinton.

In 1999 Beverly's lobbying efforts were blamed for "stripped key provisions" from a bill to protect nursing home residents in Arkansas.

In August 2000 Beverly sponsored a Democrat political meeting in Arkansas at which Clinton was present.

The story of what happened in Arkansas during the scandal involving the Clintons is long and tortuous. There are many inferences and possibilities in the details of the account. It would not be possible to tell the complex story with extracts. I have therefore put two articles describing what happened into a separate web page. Click Here to go to it.

There is a short summary in the article "The Shame of our Nursing Homes" on a separate page.


Health Line April 2, 1999

Arkansas legislators have "stripped key provisions" from a bill designed to give nursing home residents 22 specific rights, drawing charges that the bill has been "substantially weakened."

After measures, which would have instituted a public rating system and banned homes from spending government money to attract business, were cut, and a provision "making it easier for nursing home residents to sue over bad care" was "drastically narrowed," sponsor state Sen. John Brown (R) complained that the nursing home industry -- including monolithic Beverly Enterprises Inc. -- lobbied intensively against the bill and even wrote amendments that weakened it.

Not that all is lost, however. Brown said, "After two months of listening and arguing, I think it's about as close to being as fair as we can get it"

Social Security tops Lincoln's LA speech

LOS ANGELES -- Sen. Blanche Lincoln had a word for her speech Monday night at the Democratic National Convention, her most high profile address since Arkansas voters first sent her to Washington eight years ago: "Awesome!"

Lincoln, 39, became the youngest woman ever elected to the Senate in 1998 and only the second from Arkansas.
Lincoln and the Clintons were not the only Arkansans on the podium Monday.
Special invited guests included Clinton administration officials Brady

Anderson, Mary Mel French and James Lee Witt, U.S. Reps. Marion Berry and Vic Snyder and retired U.S. Sens. David Pryor and Dale Bumpers.Alltel Corp.,

Beverly Enterprises, Entergy Corp. and Southwestern Bell were among the sponsors.

Beverly and Litigation in Florida

In Florida there is a bitter conflict between corporate chains on the one hand and patients and their lawyers on the other. Regulators in Florida have been particularly lax in the past. They have not responded to complaints and poor standards. Citizens and citizens groups incensed by poor quality care in for profit homes have found the only way to force chains to improve the care they give is to sue them.

These groups target the worst homes. They find families whose relatives have been mistreated and persuade them to sue. They have enlisted a number of lawyers in this process. Florida's laws allow large punitive damages. The neglect has been so gross and the suffering so great that the courts have awarded massive damages. Insurers are now refusing to insure homes unless their performance in care is excellent. This is cutting into profits.

Beverly leads a massive lobbying and public relations effort to persuade the state government to pass laws, which limit the damages and the legal rights of the relatives of nursing home residents. While Beverly assures its shareholders that it is doing well and the law suits have little impact, it claims in Florida that they are forcing it into bankruptcy.

Citizens groups are incensed by the corporate claims. This has been the only effective brake on corporate excess. The lawyer who has championed their cause has matched corporate political donations from his personal funds. They both know that if you want legislation favourable to your position you have to pay for it.

Some fear government remains too "cozy' with industry;
The Tampa Tribune November 15, 1998

But the industry's influence doesn't end there. Its lobbyists have the collective power to open almost any door in Tallahassee.

J.M. "Mac" Stipanovich, who managed Gov.-elect Jeb Bush's 1994 campaign and was chief of staff to Gov. Bob Martinez, represents the Florida Health Care Association.

Jim Krog, former chief of staff for Gov. Lawton Chiles, lobbies for Extendicare.

Prominent lobbyist and prolific campaign contributor Jack Cory represents Manor Care, which recently merged with Health Care & Retirement Corp.

Cathie Herndon, former House budget director, lobbies for Beverly Enterprises Inc.

COMMENT:- There are many articles describing what is happening. They take different points of view. The next one examines the arguments of both sides. I have put it on a separate web page.

Fight looms over nursing home suits;
The Tampa Tribune March 8, 1999

CLICK HERE to read this article

Beverly and Litigation in Arkansas

In Arkansas the nursing home corporations are doing the same thing. Note that it is primarily the for profit corporate homes which are the cause of the problem. The not for profit groups are caught up in it, both because they have to compete to survive and because thheir insurance premiums also go up with the rest of the "industry". Not only lawyers but citizens are opposing this law.

Industry proposes changes to stem insurance costs
The Associated Press State & Local Wire January 25, 2001, Thursday, BC cycle

Increasing lawsuits and soaring liability insurance costs could put Arkansas nursing homes out of business if the Legislature doesn't act, officials warned Wednesday.

The nursing home industry is promoting legislation that would cap monetary awards, shorten the statute of limitations for legal complaints and limit what evidence can be used to determine negligence.

"Our great concern ... is the increased number of lawsuits that we're seeing and the increased amount of liability coverage that's being required by nursing homes," said Randy Wyatt, executive director of the Arkansas Health Care Association.
A spokesman for Arkansas trial lawyers panned the proposal as an attempt to shirk the blame for negligence that has caused serious injuries and deaths among nursing home patients.

"We would oppose any legislation that would try to penalize victims of negligence and abuse rather than strengthen accountability for the people causing the problems," said Carol Utley, executive director of the 1,000-member Arkansas Trial Lawyers Association.
"We desperately need this," said David Banks, chairman of Beverly Enterprises, which moved the nation's largest nursing home chain from California to Fort Smith a few years ago.

Two-thirds of Beverly's homes in Arkansas are losing money, Banks said. He said the company lost $50 million in the state last year. "I haven't asked you for anything since I've been here," he said. "I'm begging this time."

Nursing home liability caps debated
The Arkansas Democrat-Gazette January 25, 2001, Thursday

Trial lawyers and nursing home owners denounced one another Wednesday over proposed legislation to limit nursing homes' liability and make it harder to win lawsuits against them.

Nursing home industry leaders called for passage of a bill that would cap damage awards against nursing homes and restrict when evidence of misconduct could be used against them.

"We're in a crisis probably like none that I've ever seen in my 30 years," said David Banks, chairman of Fort Smith-based Beverly Enterprises, the largest nursing home operator in the nation.

Unless liability judgments are controlled and more public aid is generated, Banks said, Arkansas nursing homes will close and liability insurance costs will soar beyond reach of the remaining facilities.

Later, a trial lawyer who specializes in suing nursing homes charged the nursing home industry is misleading the public and shirking the care of the most disadvantaged.

James L. Wilkes II, a Florida lawyer who has opened a branch office in Little Rock, said nursing home operators are fleecing the state, funneling money to management at the expense of residents.

"If you did to your mother or your grandmother the things nursing homes in Arkansas are doing to their residents, you would be prosecuted," Wilkes said in an interview with the Arkansas Democrat-Gazette. Advocates for nursing home residents also vowed to fight the industry proposal, which has the backing of state Sen. John Riggs, D-Little Rock, and state Rep. Roger Smith, R-Hot Springs Village.
Arkansas could be the first state to consider litigation caps for nursing homes, Banks said.

Virginia Cross, the vice president of Arkansas Advocates for Nursing Home Residents, denounced the industry proposals. She said lawsuits force nursing homes to make improvements.

If the proposal wins enactment, residents will be at the mercy of the nursing homes, she said. "There will be no way to get justice."

In recent years in Arkansas, lawsuits against nursing homes have alleged everything from deaths due to improper medication, to residents receiving baths from floor cleaner, to a patient wandering into the path of a vehicle.
Banks said that last year more than half of the 233 nursing homes in the state told the federal government they lost money, the losses totaling $ 50 million. The homes have more than 20,000 patients, according to state figures. In Florida, Banks said, where Wilkes has received highly publicized multimillion-dollar verdicts against nursing homes, the costs for insurance liability have skyrocketed. "Nobody can afford it," Banks said. "They're all going naked."
Wilkes disputed the industry's contention that it was reeling financially. Many nursing homes have shell corporations to which they funnel management fees, he said. "What I'm hoping is that this debate they've started will allow people to look at the suffering and deceit and exploitation that is occurring in nursing homes across the state of Arkansas," Wilkes said.

COMMENT:- Citizens have made enough fuss to have some impact on this law.

Bill to shield nursing homes to be revised
The Arkansas Democrat-Gazette February 13, 2001, Tuesday

Backers of a bill that would cap the liability of nursing homes say they will amend it to require nursing homes to meet staffing requirements and to drop a provision that would have established a new exemption from the state Freedom of Information Act.

Federal Lobbying for Medicare

Corporations have built their nursing home empires by charging Medicare for the equipment, drugs and therapies, which they provide. It is clear that the system was raped. Government had tried repeatedly to contain costs and limit the misuse of Medicare. They eventually passed legislation in 1997 and 1998 which turned Medicare payments into a managed care system. Fixed fees were paid for providing care. This had a major impact on the incomes of the chains when contrasted to not for profit, government and Mom and Pop homes. These had concentrated on providing needed care rather than profit. Chains found themselves in serious trouble.

Corporations have consequently lobbied frantically during the Medicare legislative process to make it more favourable for profits for their particular activities. Since that time they have lobbied frantically for increases in funding to give them relief, claiming that it was the legislation rather than their recklessness which was to blame. Beverly has been among the most active in lobbying.


COMMENT:- Sometimes homes have different interests and lobby against one another. Many believe that political donations and costly lobbying determine the sort of laws which are passed. The laws follow the money. This is why attempts by less wealthy citizens to force politicians to actually reform health care have failed repeatedly.

Modern Healthcare October 26, 1998

As the smoke cleared from last week's passage of the massive federal spending package, nursing home chains were licking their wounds from an internal fight over a proposal that would have redistributed billions of dollars in Medicare skilled-nursing payments from one segment of the long-term-care industry to another.
The proposal was backed by Owings Mills, Md.-based Integrated Health Services, the nation's third-largest nursing home chain, and two major long-term-care groups, the American Health Care Association and the American Association of Homes and Services for the Aging.

But it was opposed by Fort Smith, Ark.-based Beverly Enterprises, the nation's largest nursing home chain, and Toledo, Ohio-based HRC ManorCare, which is among the nation's largest. Both companies stood to lose under the proposal.

And each side enlisted giants of inside-the-Beltway healthcare lobbying to aid them. Integrated's chairman, Robert Elkins, M.D., a major Democratic contributor, along with nursing home executive Alan Solomont, a Democratic contributor and a 1996 presidential campaign fund-raiser, persuaded the White House to support Integrated's position.

But Beverly countered with the lobbying clout of Michael Bromberg, the one-time head of the Federation of American Health Systems and a well-connected Republican lobbyist.

In the end, Bromberg, Beverly and HRC ManorCare won. The proposal failed because it could not generate enough support to be included in the omnibus budget bill passed early last week, despite the support of the Clinton administration and such top Democrats as Senate Minority Leader Thomas Daschle of South Dakota.

COMMMENT:- Corporate chains lobby by contributing to various industry groups and also independently.


WASHINGTON AT WORK; Insider Bemoans What He Wished For
The New York Times May 20, 1999

As Republican national chairman, Haley Barbour designed his party's campaign to cut the growth of Medicare. Now he has taken on a new assignment. As a lobbyist for a dozen large nursing home companies, he pleads with Congress for relief from the law he helped write.
He confirmed that his clients included the Sun Healthcare Group of Albuquerque, N.M.; Vencor Inc. of Louisville, Ky.; the Mariner Post-Acute Network Inc. of Atlanta; Beverly Enterprises of Fort Smith, Ark.; HCR Manor Care Inc. of Toledo, Ohio; Genesis Health Ventures of Kennett Square, Pa., and Extendicare Inc. of Markham, Ontario.

Pressing for Cash Troubled Times in Nursing Homes
Albuquerque Journal August 4, 1999, Wednesday

Last of a four-day series

Barbour, in an interview in his well-appointed office just a few blocks from the White House, said he was retained in April as a lobbyist by a consortium of about 10 to 12 nursing-home companies.

Those companies include Sun Healthcare Group of Albuquerque; Beverly Enterprises of Fort Smith, Ark.; and HCR Manor Care of Toledo, Ohio.

The lobbyist said his job is to work Republican members of Congress.

Former House leader Vic Fazio, D-Calif., was hired by the same group to take the lead in lobbying Democrats, Barbour said.

Fazio, while a member of Congress, voted for the Balanced Budget Act of 1997.

Legal Times May 24, 1999

The nursing home industry has launched a major lobbying campaign to try to regain some of the Medicare dollars it lost as a result of the Balanced Budget Act of 1997.

Since the cuts were implemented, nursing homes have been paid about $270 per patient per day, which is $40 to $100 less than they were paid previously, says Michael Bromberg of Steelman Health Strategies, which represents Beverly Enterprises Inc., the largest nursing home chain in the country. Although Beverly is still in good financial health, the cuts are keeping the company from providing as much patient care as it would like, he says.
But patient advocates say that the nursing homes' claim that lower reimbursements are endangering patient care is questionable, since complaints about inadequate care existed long before the cuts took effect last year.

"Even before the Balanced Budget Act , there have been well-documented cases of poor-quality care, " says Claudia Schlossberg of the National Health Law Program, which advocates on behalf of seniors. The bigger problem, she says, is that many nursing home staffs are poorly trained and underpaid.

A report issued by the General Accounting Office in March noted that one quarter of the nation's approximately 17, 000 nursing homes had problems that "caused actual harm to residents or placed them at risk of death or serious injury."

The Times-Picayune January 9, 2000 Sunday, ORLEANS

Businesses and their interest groups -- from the American Medical Association to Boeing Co. and Sprint Corp. -- spent $697 million in the first six months of 1999 trying to influence Congress and the federal government, a new report says.

The health-care industry spent the most on federal lobbying from January 1999 through June 1999, shelling out $95.5 million. The communications and technology industry ranked second, spending $94.6 million; and finance and insurance ranked third, spending $89.8 million, according to the campaign finance research FECInfo.

Each of these groups had plenty at stake. For example, Beverly Enterprises Inc. and hospitals pushed to erase a cut in Medicare payments, which caused heavy losses and even bankruptcies for some firms.
Hospitals, nursing homes and other providers of care to the elderly won a yearlong multimillion-dollar lobbying battle to get Congress and the Clinton administration to raise Medicare payments. In November, President Clinton signed the $16 billion increase in Medicare legislation after the industry complained that the 1997 balanced-budget law cut their Medicare payments too deeply.

Conflict of Interest appointments

Australia's Minister for Health is not alone in appointing corporate staff from organisations, which indulge in fraud to positions where they are required to police fraud. He is also not the only politician who has close relationships with people who have a big financial interest in health care - but hopefully not as close as one referred to here.


COMMENT:- VanMeter is in prison for accepting a bribe from a small company whose executives are also in prison. Very different treatment to that meted out to Beverly and its executives. They are replacing this small time criminal with someone from Beverly - someone responsible for the internal audits which one assumes should have detected the Medicare fraud and blown the whistle.

Fired health official replaced

Fired Health Department Deputy Commissioner Brent VanMeter has been replaced.
And Darren L. Burgess, a certified public accountant, has been hired to serve as assistant deputy commissioner.
The hiring of Darren Burgess has caused some grumbling among nursing home industry officials who contend Regier is replacing one group of people with cozy family relationships with a different group of people with similar relationships.

Regier, however, said Darren Burgess is well qualified for the position, having served the past six years as senior manager of internal audits for Beverly Enterprises, a large corporation that operates several hundred nursing homes. Burgess also worked two years in the state auditor's office.

Lawmaker's 'relationship' with lobbyist sparks ethical concerns
Modern Healthcare July 3, 2000, Monday

A California newspaper's account of an "intensely personal" relationship between Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, and healthcare super-lobbyist Deborah Steelman burned like wildfire last week in Washington's healthcare policy circles.

The Bakersfield Californian's report about Thomas and Steelman raised questions about a conflict of interest stemming from the relationship.

As the subcommittee's chairman and congressional GOP's de facto leader on healthcare, Thomas wields great power over the fate of many of Steelman's clients, which include pharmaceutical companies as well as nursing home chain Beverly Enterprises and Chicago's Northwestern Memorial Hospital.

(Click to go to)



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