By Thomas Goldsmith and Riley Davis

With the federal government footing much of the operations bill, state veterans homes have existed since the Civil War, first to care for homeless survivors of war and those with disabilities. A second wave of soldier’s homes came after World War I.

“Prior to World War I, programs for veterans centered on pensions and ‘soldiers homes,’ where the aged and disabled could live,” historian Bernard D. Rostker wrote in a 2013 Rand Corporation research report. “After World War I, rehabilitation became an important third element of veteran care.”

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The focus of the state-owned nursing homes has changed as the nature of wars has transformed. Preference for spots in North Carolina’s homes generally goes to veterans with service-related disabilities, such as exposure to Agent Orange in Vietnam, exposure to radiation at Nagasaki and Hiroshima, or conditions related to their Gulf War environmental exposure.

North Carolina’s COVID-19 outbreaks brought the state’s first virus-linked death on March 24, to a Cabarrus County man, and soon started taking an exceptional toll in long-term care facilities.

Of 1,903 COVID-related deaths in the state by July 30, at least 797 have been of people who lived in nursing homes. According to state and corporate records, 36 of North Carolina’s military veterans have died from COVD-19 in nursing homes that are owned by the state, but for more than two decades have been under the contract management of a privately owned health care conglomerate.

State records show that the state of North Carolina agreed in 2014 to pay Georgia-based PruittHealth an estimated $207 million in the past five years to run the state’s veterans nursing homes. The company had received many millions more in commissions during the preceding 17 years.

If the current contract wins a second extension in December, Pruitt will take over the management of two new state veterans nursing homes, already announced for Raleigh and Kernersville.

Dr. Philip Sloane, a geriatrician and distinguished professor of family medicine at UNC  Chapel Hill, speaking generally, said COVID-19 overwhelmed nursing homes and other health care facilities because it was indeed novel and came on so fast.

“When COVID gets into a facility, it gets into it,” he said. “And that’s the problem, especially early on when we just knew nothing and nursing homes were so ignored by all the responses to COVID.”

Public health officials concentrated on getting ventilators and other hardware, but didn’t initially focus on making sure that nursing homes had personal protective equipment or PPE, Sloane said.

“Nobody said that and then they were stuck,” he said.”Then when you got somebody that you think had COVID, if they had to get the health department to do the test, the test would come back in five days, or six days. We really flubbed it for months, as a society.”

Show me the money

North Carolina’s Veterans Nursing Homes have been managed for 22 years by the Georgia-based PruittHealth company, which takes a commission exceeding $3.5 million annually from the stream of Veteran Administration, Medicare, Medicaid and other funding designated to operate the state veterans nursing homes.

The amount of Pruitt’s commission has importance because for-profit, long-term-care ownership and management chains have the potential to put concern for profit above residents’ safety, said Suzanne Gordon, an assistant adjunct professor at the University of California-San Francisco School of Nursing and a widely published authority on long-term care.

“It’s the perfect storm when you have a pandemic like COVID-19,” she said in a phone interview. “You have poor staffing, you have poor pay so that nursing home workers have to work in multiple different facilities and they take the infection from one facility to another. You have an incredibly vulnerable population.

“You have low staffing and low training.”

Pruitt privatizes management

PruittHealth, founded in 1969, first managed a facility of this type in 1996, when the company won a contract to run the Georgia War Veterans Home in Milledgeville. A story in the Atlanta Constitution describing the deal noted that the Georgia State Employees Union sued Pruitt in an unsuccessful move to halt the takeover. The newspaper also cited past problems with Pruitt’s supervision of other Georgia nursing homes during the 1990s.

By 1998 Pruitt had successfully bid for management of the North Carolina homes. Since then, the company has retained the contract for five terms in a process that garnered little media or public attention. The company manages the four North Carolina state veterans nursing homes — comprising 100 beds in Black Mountain,150 beds in Fayetteville, a 100-bed center in Kinston, and 99 beds in Salisbury.

shows people in military uniforms talking to an aging veteran who's in a wheelchair, they're all smiling and laughing.
Before the days of COVID-19, local service groups would frequently visit the veterans homes. In this photo from Dec. 2016, Chief Master Sgt. Shane Wagner (left), 4th Fighter Wing command chief, and Col. Christopher Sage (center), 4th FW commander, laugh with Eugene Shaw, U.S. Army veteran and resident of the State Veterans Home in Kinston. More than 45 volunteers visited with over 90 veterans and passed out goody bags and holidays cards. Photo credit: U.S. Air Force/ Airman Shawna L. Keyes

The only bidder beside Pruitt for the most recent North Carolina contract was the for-profit, Minnesota-based Health Dimensions Group, which failed to complete the second portion of a two-bid process. The company manages a Wisconsin state veterans home in Chippewa Falls, which has had no COVID-19 cases, according to a CMS database.

The Health Dimensions 2014 bid for the work provided by the North Carolina Department of Military and Veterans Affairs lacks a crucial detail — the percentage of revenue that the company would receive to oversee the homes. Health Dimensions officials did not respond to a request for additional information.

Today, PruittHealth manages the state veterans nursing homes under a one-year extension of the 2015 document it signed in 2015. Anna Amirkhanyan, an American University professor who studies long-term care, was an author of a paper that compared public, nonprofit and for-profit nursing home care.

“Consistent with … the ample empirical research on nursing home quality, we found that for-profit nursing homes have significantly lower care quality compared to public and nonprofit nursing homes,” Amirkhanyan and colleagues wrote in 2018 in the academic Journal of Public Administration Research And Theory.

PruittHealth company has championed openness about its COVID-19 caseloads and announced that a resident of one of its Georgia nursing homes was presumed to have the disease on March 19.

On April 1, the company announced an Alert Code Red, or high-level warning, for its PruittHealth-owned and -operated Carolina Point nursing home in Chapel Hill, managed and owned by the company, but not a veterans center.

An Alert Code Red means only essential staff will come to work and that no new admission will be allowed. In addition, specific, higher levels of infection control including more frequent cleaning and “postponing communal activities, ceasing visitation, and screening staff and patients daily.” The early outbreak at Carolina Point eventually resulted in the COVID cases among 20 staff and 89 patients, with the deaths of 20 patients.

First of 36 veterans dies

The first death of a veteran in a COVID-related case came at the Kinston state veterans nursing home on April 21, of Benjamin Vincent Askew, 94, of Kinston, who served during World War II as a radio operator on a PV1 bomber in the Aleutian Islands.

Pruitt sent a statement to the Neuse News about the April 21 death: “We are saddened to share that a veteran at North Carolina State Veterans Home – Kinston passed away Tuesday, April 21 after testing presumptive positive for COVID-19. The veteran’s family has been informed, and out of respect for the situation, we will not be commenting further.”

One of Askew’s daughters, Jo Teague, 69, of Raleigh, said in a phone interview that Askew had developed a fever the last few weeks of his life, leading up to his death April 21.

“It would come and go, come and go, and then he had a urinary tract infection, I believe,” she said. “Two or three days before he died, they did some blood work and tests. They found out that he had COVID. But we don’t think that’s what killed him.”

Teague, a substance abuse counselor, said she was not aware of the private management of the Kinston veterans nursing home. However, both she and sister Ann Kohler, 74, of Virginia, seemed somewhat unclear about the complex web of relationships between the federal Department of Veterans Affairs, the local VA Hospital, the state-owned nursing home, the management company out of Georgia, and ancillary functions such as a hospice service.

“I really don’t know anything about that. I just know that dad’s facility was very, very kind and helpful, and professional,” Teague said.

‘You never think there’s enough’

The sisters expressed general positive feelings about the way the Kinston center was run by Pruitt, accepting as a given that health care facilities operate with too few employees.

“It’s like everywhere,” Kohler said. “You never think there’s enough help — especially at night and on the weekends. And experiencing a lack of communication sometimes between shifts.

“There are always money restrictions. And so there’s only so many people that you can have on the floor on the weekends and at night,” she said.

“I mean people can’t work seven days a week, 24 hours a day.”

In fact, for-profit providers like Pruitt must constantly deal with the tension between personnel expenses and winding up in the black. Staffing up requires more salaries and/or overtime, which can put a dent in profits.

“Staffing is a widespread problem in long-term care,” said Lauren Zingraff, executive director of the non-profit Friends of Residents in Long Term Care. “COVID-19 shone a very bright spotlight on how severe the staffing shortage problem is.”

Part of the problem, Zingraff added, is that long-term care staff are generally not paid a liveable wage.

“They have no health benefits, they have no benefits of any kind,” she said. “If they’re sick and they don’t come to work they don’t get paid.”

shows a group of people, many of them dressed in military uniforms, gathered around a pallet of boxes in the hallway of a building.
Before the days of COVID-19, local service groups would frequently visit the veterans homes. In this photo from Dec. 2016, members of Seymour Johnson Air Force Base, North Carolina, the Goldsboro Elks Lodge #139, and the local Wayne County community receive instructions before visiting with the residents of the N.C. Veterans Home, Dec. 24, 2016, in Kinston, North Carolina. More than 45 people volunteered to pass out goody bags and holiday cards to the veterans. Photo credit: U.S. Air Force/ Airman Shawna L. Keyes

‘No major issues … exist’

In 2015 the North Carolina Department of Administration delved into the contract relationship between state government and PruittHealth through the questioning of an unidentified Department of Veterans Affairs official that appears in a nine-page state report related to the deal. Among the exchanges:

C. Has the State ever performed formal background checks on the Management Company and its principles? Please note that CPA firms are required to perform due diligence checks to accept new engagements?

ANSWER: The State has not performed any “Background Checks” on the Management Company. Pruitt Health is a large HealthCare Provider and is required by Banking Institutions to have annual CPA reviews and Statements issued. The CPA firm is nationally recognized and will produce Statements.

E. How long has Management Company performed a contract for the State of North Carolina?

ANSWER: First contract was awarded in 1998 and every five year, the Management Company had to “bid” the contract for rendering services.

F. Any issues with the Management Company?

ANSWER: Normal business relationship exists with Management Company, minor problems do occur which is to be expected. No major issues have developed and none exist.

Role of private management questioned

Some nursing homes and other long-term care facilities tend only to attract attention for their failings. These centers encountered the problems they are facing now, in part, because of their complicated funding and reporting structures, a Duke expert said.

“There’s this mixture of federal, state, county regulation and oversight, the reporting up the chain is very different,“ said Nathan Boucher, a professor in the Sanford School of Public Policy at Duke University and a research scientist at the Durham VA.  “And that piecemeal, that patchwork, that mixed oversight of various things, it creates a problem.”

The veterans nursing homes run by Pruitt mostly score well on rankings by the Centers for Medicare and Medicaid Services, especially in the category of staffing, an element seen as crucial to care.

In its 2014 bid to retain its North Carolina contract, the company cited its “many deficiency-free licensure and certification surveys” among all its facilities.

As another recommendation, company CEO Neil L. Pruitt cited 70 awards to his facilities during a three-year period from the American Health Care Association. Known as AHCA, the industry group in 2013 named Neil Pruitt Jr. to the position of chair of its board of governors.

Pruitt, his father, and his wife Mebane have donated $138,076 to political action committees of the AHCA starting in 1987. Overall, CEO Neil L. Pruitt Jr. has made bipartisan donations of almost $1 million to candidates, political parties and PACs. In 2013, Sen. Mitch McConnell (R-Ky.) named Pruitt to the federal Commission on Long-Term Care.

“I’ve seen firsthand how post-acute care has evolved through the years and become a vital partner in the long term care continuum,” Pruitt said in a statement. “But we’ve never lost sight that it all hinges on quality.”

Problems before COVID-19

However, the federal Centers for Medicare and Medicaid Services recorded 47 health deficiencies between 2017 and 2019 at the Pruitt-run North Carolina veterans nursing homes.

Despite a relatively clean record, there have been significant deficiencies in Pruitt’s administration of veterans homes in North Carolina. A new report from the state Department of Health and Human Services says that the Pruitt-run veterans nursing home in Salisbury allowed dozens of relatives of ailing veterans to make drive-up car visits for 10 days in June. The visits came during a high-level alert at the home and despite federal and state bans on such visits.

This deficiency certification is an element that could be considered before December when Pruitt seeks its second renewal of its $207 million contract of 2015.

The deficiencies listed below happened eight years ago, well into Pruitt’s management of the veterans homes. They had been public record for two years when the state last asked for bids on the veterans nursing home management contract.

For example, a 2012 state report cited Pruitt’s Salisbury deficiencies for failures to:

  • Keep pressure sores from getting worse
  • Keep the medication error rate at 5 percent or less
  • Secure catheters for two residents
  • Throw away out-of-date meds
  • Post results of DHHS survey results
  • Provide proper dental care for a resident with only 12 teeth, one broken
  • Make sure two special locked doors open as mandated when a fire alarm sounds

Most of the recorded deficiencies were at lower levels, but Kinston recorded a high level (J-level) deficiency, indicating potential immediate jeopardy to a resident, with a note of past noncompliance.

Salisbury also had a J-level deficiency, under which it was told to make sure the facility was free of accident hazards.

The veterans nursing home, CMS said, should “protect each resident from all types of abuse including mental, sexual abuse, physical punishment and neglect by anybody.”

Most recent pre-COVID deficiencies in NC’s state veterans nursing homes

Only the most recent inspections by the state Department and Health and Human Services into the Pruitt-run homes do not cover the period in which COVID-19 infected residents of three of them.

A 2018 health inspection of the Salisbury home resulted in a finding of immediate jeopardy in the case of a resident who “eloped” or wandered away from the home. An unidentified police officer told inspectors that he had gotten a radio call about a missing veteran.

“Campus Police further revealed that he drove near the building and observed Resident # 6 immediately,” the state report said: “He reported [that] the nurse was coming up on him (Resident # 6). As soon as I shined my lights (sic), Campus Police further revealed that Resident #6 was sitting right across from the helicopter pad in front of Building 10 (the facility) in his wheelchair.”

Another inspection found that the Salisbury home had failed in 2019 to carry out the physician-ordered blood tests for two of six residents with cognitive disorders, one of whom went two weeks without testing for anti-coagulant status. Other residents failed to receive nutritional supplements as ordered, inspectors said.

Riley Davis provided assistance via the the NC News Intern Corps, a program of the NC Local News Workshop, funded by the North Carolina Local News Lab Fund and housed at Elon University’s School of Communications.

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Thomas Goldsmith worked in daily newspapers for 33 years before joining North Carolina Health News. Goldsmith is a native Tar Heel who attended the UNC-Chapel Hill, and worked at newspapers in Tennessee...