Articles Posted in Conflicts of Interest

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Virtually all those who work closely on elder care issues agree that “front line” care workers are the most important individuals affecting the quality of care that residents receive in long-term care facilities. These are the dedicated employees who work day in and day out directly with seniors. They do the actual work–helping to groom, dress, feed, and transport seniors. They also provide the activities, social interaction, and basic medical care that the residents need. Lawyers, advocates, and others universally agree that a large, trained, dedicated cadre of direct line care workers is one of the best ways to ensure seniors receive the care they are entitled at these facilities.

Unfortunately, that is not always the case. In fact, it often is not the case. And it is usually not because the care workers are not dedicated, hard-working individuals. Instead, the problems are usually rooted in nursing home owners and operators trying to maximize profits by cutting staffing levels, compensation, and resources to those care workers. In many ways, when large-scale disputes at these facilities arise, the residents and direct-line care workers are on the same side–fighting for a better balance between resources committed to ensuring quality care and profits for the facility.

This antagonistic relationship between front line nursing home care workers and management sometimes boils into employment law litigation. This is particularly true when care workers stick up for residents and are punished as a result.

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A new lawsuit filed in Illinois this week alleges illegal kickbacks in a sale of a Chicago-based pharmaceutical company owned by the operators of Illinois nursing homes, reports the Chicago Tribune. The suit charges pharmaceutical giant Omnicare, Inc. with paying kickbacks in its purchase of Chicago based company Total Pharmacy. Total Pharmacy is owned by Chicago nursing home operators Phillip and Morris Esformes.

The lawsuit was filed by two whistleblowers, Maureen Nehls and Adam Resnik, both former employees and consultants for Total Pharmacy.

Nehls and Resnik described the details of the illegal activity, explaining how Omnicare agreed to pay more money (ultimately $25 million) to buy Total Pharmacy, so long as they also received guaranteed contracts to provide medical drugs to many of the nursing homes owned by the Esformeses. In addition, the Esformeses were allowed to keep an additional $7 million in accounts receivable, a hidden payment to avoid taxes and inflate the actual value of the sale for the Esformeses.

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A recent study published by the Journal of the American Medical Association reported that hip protectors did not provide any substantial reduction in the incidence of hip fractures. However, the authors of the study failed to disclose that they receive research funding from the manufacturers of bone-strengthening drugs. The JAMA defends itself, claiming that it cannot possibly investigate the financial sources of all of its authors, and experts on integrity and ethics in research believe that such failures to disclose are typically innocent. However, others believe that the study could easily be interpreted to discontinue the use of hip protectors in favor of the products of the authors’ corporate backers.
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A former New Jersey nursing home director was ordered by a judge to reimburse $4,320 she received in exchange for swaying residents to use a particular pharmacy. In October, the former nursing home director pleaded guilty to 4th degree theft for her nursing home abuse. Between January 2000 and February 2002, the former director accepted cash kickbacks from the pharmacy owner for directing residents to exclusively fill prescriptions at his location. The pharmacy owner was sentenced to 7 years in prison and ordered to pay $1.1 million in restitution.

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As president of the U.S. Chamber of Commerce, he has long been “hard” on federal regulation, but now he faces it personally. For 12 years, he has been a board member of Sunrise Senior Living, a living facility designed for Senior Citizens. Sunrise Senior Living is a publicly traded company being probed by the Securities and Exchange Commission (SEC). Sunrise co-founder started as the Chamber of Commerce president’s driver while still in college and later became a Chamber speechwriter. Recently, the SEC began in inquiry into an allegation that this president and other insiders may have improperly cashed $32 million in stock options before Sunrise in May announced an accounting problem that caused its stock to drop.

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Pharmaceutical companies that belong to the International Federation of Pharmaceutical Manufacturers & Assns. must adhere to a newly revised code of ethics. Among the requirements, pharmaceutical companies are forbidden from giving docs money or other gifts that might influence drug choices, such as paying for trips to golf resorts or luxury hotels. The ethics code had not been update in a decade and now applies to 26 member companies, including Pfizer.

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Last week, federal prosecutors charged a leading government Alzheimer’s researcher with engaging in a criminal conflict of interest. The researcher, working for the National Institute of Health (NIH), had earned $285,000 in private consulting fees from a pharmaceutical giant. The researcher stands accused of performing consulting work for Pfizer Inc. that improperly overlapped with his government duties.

This charge comes after the government announced tougher ethical restrictions on NIH researchers to avoid such conflicts of interest where employees were making significant money from consulting with pharmaceutical firms. If convicted, this researcher faces a maximum of 1 year in prison and a $100,000 fine.

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