One of Indiana’s largest home health care providers, facing allegations that it put patients in immediate jeopardy, has agreed to sell itself to a competing company.
Carmel-based Nightingale Home Healthcare Inc. will be acquired by Alliance Home Health Care, a family-owned Indianapolis company, in a deal that could be worth as much as $3 million.
A sale would end months of uproar for Nightingale, which has been battling charges from the Indiana State Department of Health that it put patients in harm’s way.
Nightingale sought bankruptcy protection in December after the state’s determination prompted the federal Medicare program—the source of most of Nightingale’s $14.8 million in annual revenue—to terminate its contract with the company.
Nightingale won a temporary injunction against Medicare in January, but that expired June 8.
Meanwhile, Nightingale was facing growing legal and financial hurdles. Last month, an administrative law judge denied the company’s request to overturn Medicare’s decision to end funding.
The company could have appealed, but said that “excessive and continuing administrative expenses” of the bankruptcy forced its hand.
Nightingale “has determined it is necessary to cease operations generally, with the target of transitioning employees and patients … to another qualified provider to ensure continuity of employment for its staff and patient care for its patients,” the company said in a June 2 motion.
Alliance, a 25-year-old company, said it decided to buy Nightingale after hearing about its problems and growing concerned that patient care could be disrupted.
“This all came up pretty quick, in the last month or so,” said Kimberly Bremer, Alliance co-owner and director of private duty services. “We just kind of took the plunge.”
She said that Nightingale’s patients—many of them elderly and in need of care for chronic conditions—could have “fallen through the cracks” unless another company stepped in.
Under the deal, Alliance is to pay $1.5 million at the closing date, and an additional amount up to another $1.5 million based on revenues.
The sale could close by July 15. A hearing on the private sale is set for 10 a.m. June 29 before U.S. Bankruptcy Judge James M. Carr in Indianapolis.
Alliance said it will offer jobs to many of Nightingale’s employees. Nightingale has about 70 full-time employees, 125 part-time employees and 19 contract employees. It provides services to about 900 patients throughout Indiana.
Alliance has about 125 full-time-equivalent employees, including nurses and aides. The company declined to disclose its revenues.
The Nightingale name will disappear, following 20 years in business. Alliance said it saw no value in using the troubled company’s name.
“We like our reputation,” Bremer said. “We have a very strong name in the Indianapolis area. We would like to continue it … and leave the Nightingale baggage behind.”
Nightingale’s troubles began Oct. 26 when the Indiana State Department of Health launched an investigation in response to patient complaints.
The investigation found problems with staffing, training, follow-up on lab results and coordination between field staff and the home office. It concluded that Nightingale had put patients in “immediate jeopardy”—a designation that can be fatal to a health provider’s reputation.
The state investigations found that, in the fall of 2015, one patient with a urinary tract infection received no visits from Nightingale staff for a month after his usual nurse went on medical leave. He developed sepsis and was taken by ambulance to the hospital. He was discharged nine days later but returned to the hospital within 24 hours and died two weeks later, Medicare officials said.
A second patient was supposed to have his blood drawn for testing, but the agency said Nightingale staff members failed to show up to do so on several occasions. When staff members did show up, they were often unable to successfully draw blood, with one employee saying “she would have to have a refresher course in lab.”
The patient ended up hospitalized with a solid swelling of a blood clot in his chest and measurements of blood coagulation at critical levels, Medicare said.
Troubles grew for Nightingale after a court-appointed ombudsman, Eric M. Huebscher of New York City, reviewed records and interviewed more than 35 current and former employees. He found more than 1,300 complaints from patients and family members since 2011, ranging from nurses and aides who didn’t show up to serious accusations involving medical care.
According to his report, Nightingale’s nurses were forced to travel hundreds of miles a day, with more assignments than they could handle. Patients sometimes received unnecessary care to run up bills. Employees quit in high numbers, resulting in staffing turnover of more than 100 percent in just two years. Managers gave sports tickets and spa gift certificates to doctors in exchange for referrals.
Nightingale disputed findings, calling them “unsubstantiated hearsay and alleged reports” from former employees.
The company added that Huebscher “cited no evidence of harmful care … or care not certified or recertified by a physician.”
Nightingale alleged in a federal lawsuit filed in February that investigation was part of a campaign of retaliation by state officials after Nightingale’s CEO, Dr. Dev Brar, complained about “racially tinged” remarks a Health Department employee left on his voicemail.
Brar, who is Indian, said the state conducted more frequent inspections at his facilities and issued harsher reports after he complained. The comments were recorded inadvertently when a Health Department employee failed to hang up after leaving a message for Brar, the lawsuit alleges. The suit’s defendants include the Health Department commissioner and the secretary of the U.S. Department of Health and Human Services.