A few years ago, Stella started working as a nursing assistant at Almost Family in Chilton, Wisconsin. She liked the job at first—the hours were flexible, and she had a good connection with her patients. She would spend a few hours at each of her patients’ homes, cleaning up and helping them get dressed or take baths.
When Stella moved from Chilton to Green Bay to start nursing school, she decided to keep working for the company at a new location there. But upon transferring to the new agency, she said her workload increased: She recalled that the company expanded her patient roster from two or three patients to seven or eight, and since she didn’t have the use of a car, she had to shorten her visits with one patient in order to get to the next. She found herself working as many as 65 hours a week, including weekends. She asked the company why she wasn’t getting paid overtime; they said they’d look into it but never got back to her.
“I was overworked most of the time because they’d send me from one right to the next.… I was taking the bus, and I’d only have a certain amount of time to get to my next patient,” said Stella, who asked not to be identified by her real name for fear of retaliation. “There was still so much to be done—sometimes we wouldn’t get all the cares done because they needed help cleaning.” She sometimes found herself spending much of her visits finishing tasks that the previous nurse hadn’t completed.
At one point, she said, one of her patients ended her contract with the company because she was only receiving about two hours of care per day, as opposed to the four or five hours her physician said she needed; the patient was using a walker and had chronic pneumonia and couldn’t stand up to walk her dog or clean her house. Another time, Stella said she showed up at the home of an elderly patient to find him shaking and struggling to breathe. The nurse who’d been scheduled to visit him earlier in the day had missed the visit and hadn’t given him his diabetes medicine. Horrified, Stella called him an ambulance.
“It just didn’t make me feel right, doing what I did,” she said. “It was definitely really hard to leave them and say, ‘Your time is up.’” When she tried to tell her managers that she needed more hours with certain patients, she never got a response.
The Almost Family office where Stella worked is one of hundreds owned by LHC Group, a massive home health care company that employs more than 30,000 people across the country. LHC is one of only a few home health companies that have managed to grow from local operations into nationwide conglomerates, increasing its profits through a combination of cost-cutting and aggressive acquisitions.
But lawsuits, public record documents, and interviews with nearly a dozen LHC Group employees reveal that the company’s focus on efficiency frequently leads it to deprive employees of adequate pay and cut corners on essential health services. These records and interviews show that LHC, like many of its biggest peers in the home health industry, has prioritized profits at the expense of its employees and patients alike. What Stella experienced wasn’t a fluke. It was closer to a business model.
As millions of Americans reach retirement age, home health care has become one of the fastest-growing sectors in the U.S. economy. According to data from the Bureau of Labor Statistics, the personal care and health care sectors are projected to add more jobs by far, in the next decade, than any other industry. The foremost factors driving this growth are the large number of Baby Boomers aging into retirement and the relatively high cost of nursing homes. Research shows that in-home care costs around 50 percent less, on average, than care in a nursing home and eases the burden on a patient’s loved ones while allowing the patient to remain in a familiar setting. At-home caregivers also help to fill gaps in the care offered by doctors and hospitals: Many people seek in-home care in the aftermath of an injury or to help manage a chronic illness, often after being discharged from a hospital.
Even as the home health industry has grown, though, it has remained largely fractured, with thousands of small companies and nonprofits each offering care in a single city or region. According to research from the Paraprofessional Healthcare Institute, a nonprofit that advocates for home health care workers, a mere 9 percent of home health companies had more than 100 employees as of 2017; the 50 largest home health companies, meanwhile, controlled only 26 percent of revenue, much lower than in other industries.
The reason for this segmentation is that the lion’s share of home health payments come from government insurance programs like Medicare and Medicaid. Because these programs set rigid caps on how much they pay for home health services, there is a limit to how much money a home health provider can make from a given patient. This funding shortfall has helped make home health one of the worst-paying major industries in the country: The median wage for a home health aide in 2019 was just $12.15, according to the Bureau of Labor Statistics. Research from the Paraprofessional Healthcare Institute found that women made up almost 90 percent of the industry’s 2.3 million-strong workforce as of 2017. More than half of all home care workers at that time were people of color, more than a quarter were immigrants, and around one in six lived below the federal poverty line.
A few companies, though, have managed to grow into nationwide operations, mostly by pursuing an aggressive merger-and-acquisition strategy. Rather than muster the capital needed to open offices in new states or regions, these companies simply take over independent home care agencies and cut costs where they can. If a company can gobble up enough patients and trim its spending on labor, it can eke out a bigger profit and deliver returns to shareholders.
That’s exactly what LHC has done. The company started out in 1994 as St. Landry Home Health—in the words of a company website, it began as “a single home health agency in small-town America, with a mission to serve the neediest and most vulnerable members of the community.” Since then, it has acquired or merged with several dozen companies, absorbing one-off agencies throughout the South and more recently acquiring regional networks in the Northeast and the Midwest. In 2018, the company completed its largest merger to date when it merged with Almost Family, a massive home care company that had itself absorbed several small agencies.
At first glance, this acquisition strategy makes the company appear decentralized: In its most recent annual report, the company said it had more than 500 subsidiaries, and many of the agencies it absorbs end up retaining their original names and offices, so that many patients don’t ever know the difference.
When LHC acquires an agency, though, it often institutes drastic changes in how that agency operates. In the winter of 2011, LHC bought Baptist Home Health Care, where Donna worked as a nurse. It wasn’t long after that before things started to shift. “The existing [director of nursing] from prior to the merge was amazing to the employees and was all about [patients],” said Donna, who asked not to use her real name. “She was let go soon after merging because she didn’t conform to their wishes.… She stood her ground regarding her employees’ care, treatment, and pay. One by one, [new] directors came and went—from what I saw [and] was told, if they didn’t jump when told, they were gone.”
LHC Group did not respond to numerous requests for comment for this story, nor to a detailed list of questions. In the course of reporting the story, I received a message from an LHC employee who asked me why the company had specifically instructed its employees not to speak with me.
As the new director altered agency operations in accordance with LHC’s nationwide policies, nurses and their patients started to feel the strain. “Productivity was expected [to increase],” said Donna, “but [they] pushed [us] to decrease overtime significantly.” The area Donna covered as a nurse was enormous—she often drove more than 150 miles a day to visit seven or eight patients—and when the company altered her pay from hourly to per-visit, ceasing to pay her for driving time, her earnings plummeted almost overnight. She also started to notice the company cutting corners elsewhere. Managers started buying lower-quality supplies to save money, and they sent nurses and therapists to visit patients they weren’t familiar with, shifting caregiver assignments around to cut down on commute times and thus reduce overtime hours.
Another employee, Beatrice, who worked as a recruiter in multiple states for Almost Family and then for LHC, said the company had an almost obsessive focus on efficiency. They viewed recruiting as a “metrics-based numbers system,” she said—the focus was on hiring as many new staff as fast as possible to keep up with the growing patient census.
“The more referrals we get, the more cases you have,” she said. “It’s not feasible.”
“Most of us did go into [the merger] pretty open-minded … however, as we started getting further into the merger … we learned they were going to take essentially 50 percent of our [paid time off],” said Beatrice. Many Almost Family employees were infuriated: At one point, staff from the Northeast region got on a conference call with LHC executives and warned that most of their nursing staff would quit if the benefits cut went forward. Eventually the company compromised, “and the impression was, ‘You should be very thankful.’”
LHC’s focus on finding efficiencies and cutting labor costs is not unique to the company, nor is it unique to home health care as an industry. As the coronavirus pandemic slammed hospitals last year, the nation saw just how thinly spread its health infrastructure had become: Despite the exorbitant cost of medical treatment in this country, many medical workers in hospitals across the country found themselves understaffed, short on supplies, and without the means to respond to the crisis.
In addition to cutting labor costs, though, LHC’s business model also relies on increasing revenue. In order to do this, employees say the company places a nationwide emphasis on driving up patient referrals, trying to obtain as many patients as it can while still keeping labor costs down. This strategy drives up the number of Medicare reimbursements flowing into the company’s coffers, but also overloads the health staff by burdening them with an ever-larger patient load.
Laura, who worked for the sales department of an LHC-owned office in Kentucky, said company leadership put her under constant pressure to obtain an ever-increasing number of patient referrals. She spent her days driving around a few counties in rural Kentucky, canvassing hospitals and doctor’s offices to find new patients who needed home health care.
When Laura started on the job, she had to obtain 12 new Medicare patients per month; five years later, when she left the company, her monthly quota had increased to as many as 28 patients a month. Over the same period, LHC had also absorbed a competing agency in the area, and deployed that agency’s sales rep to the same area that Laura covered. She and the other rep were now competing to keep their jobs, netting the company as many as 60 new patients a month where it had once gotten 12.
“It was a very high-pressure environment,” she said. “There were weekly calls on numbers and increasing volume ... if you didn’t meet your numbers, you didn’t have a job.” If a sales representative did not meet their quota for three months, they’d be placed on probation; after another three months, they’d be fired.
LHC has also been accused of padding its revenue through downright illegal means. A whistleblower lawsuit now working its way through federal court alleges that the company ordered employees to fabricate patient records in order to get more money out of Medicare.
The fraud lawsuit against LHC began as a pair of separate whistleblower suits, one brought by a nurse in Tennessee and another by a pair of anonymous senior employees who had knowledge of company business practices. A federal court in Tennessee consolidated the two cases last year, and lawyers for the two sides are still tangling over whether to move forward with a trial.
The consolidated complaint, which incorporates allegations from both whistleblowers, accuses LHC officials of tweaking patient care data and quality ratings to increase the amount of money the company received in reimbursements from Medicare. The goal of these adjustments, according to the complaint, was to make patients appear less healthy upon admittance, and healthier upon discharge, than they actually were. Between January and March 2017, according to the complaint, there were more than 87,000 accepted changes to patient data in the company’s Beltway region alone, compared to only 245 declined changes in that region. Many changes involved adjusting a patient’s health profile to make it appear that the patient had been less mobile and more dependent when admitted to LHC’s care than when they were discharged. These changes elevated the patient to a different tier of care and increased the amount of money for which LHC could be reimbursed by the government. When the staff clinicians assigned to each patient did not endorse the changes, said the complaint, LHC’s managers would simply override them and ram through the new data: According to the complaint, there were more than 77,000 override requests in the Beltway region between 2014 and 2018.
The complaint also includes an allegation that sheds light on the company’s labor policies: According to the whistleblowers, LHC employed a strategy called “flexing,” wherein it reduced hours and paid time off at offices where the number of patients was declining, adjusting compensation on the fly to penalize offices for not bringing in sufficient revenue.
LHC is not the only home health company to face such allegations: Kindred Healthcare, the nation’s largest home health provider, settled a similar fraud case in 2016 for $125 million, and another industry giant named Amedisys settled a fraud case for $150 million in 2014; both settlements were among the largest ever paid over Medicare fraud.
If the lawsuit against LHC moves forward, it could lead to a similar settlement, which in theory could amount to a significant chunk of the company’s annual revenue. Indeed, the company’s most recent annual financial report offered a cautionary note to investors about such legal matters: “Although we believe we are in material compliance with all applicable laws and regulations,” the report read, “these are complex matters and a review of our practices by a court or law enforcement or regulatory authority could result in an adverse determination that could harm our business.”
On August 21, 2017, the Wisconsin Department of Workforce Development received a wage complaint from a nursing aide named Roberta Wiemerslage, who worked for an Almost Family office in La Crosse, Wisconsin.
“I started this out as a wage complaint,” Wiemerslage wrote on the complaint form, “and basically it is.” She went on to accuse the company of failing to pay her overtime when she worked on weekends and of underpaying her for other overtime work. Under the subsection of the complaint form labeled “Total wages still owed to you,” Wiemerslage wrote, “I’m not sure.”
Wiemerslage attached to her complaint more than 400 pages of supporting documentation, including activity logs that detailed her duties as a home care aide: bathing, hair care, wound dressing, feeding, home cleaning, skincare, bathroom assistance, and catheter maintenance. Her work calendars showed that she visited patients nearly every day for months at a time; in her first year at LHC she worked more than 330 days of the year, and she took only three days off from April through July, two of which were for her father’s funeral.
In response to the complaint, Almost Family said it had only underpaid Wiemerslage once, by around $12; the director wrote that “we now consider the matter closed.” This elicited a stern response from Jeff Glick, the official assigned to the case: “I’m sorry,” he wrote, “but I’m the person who will determine whether and when the matter is resolved.”
In May 2018, the officer wrote back to Almost Family to say that he had reviewed the evidence and was “baffled” by it. The investigator had discovered that Almost Family did not count the hours Wiemerslage spent traveling to and from her patients’ houses in determining whether she worked more than 40 hours a week and had thus deprived her of overtime almost every week she had worked at the company. The investigator determined that LHC owed Wiemerslage around $8,000 in unpaid wages. Three months later, after pressure from the investigator, LHC sent Wiemerslage a check for the missing overtime.
Wiemerslage is one of dozens, if not hundreds, of LHC employees who have filed wage and labor complaints against the company over the past decade. These lawsuits, and the testimony of nurses and aides who work for the company, shed light on the company’s efforts to reduce its labor costs.
Rocío Avila, an attorney with the National Domestic Workers Alliance, says that in her experience, this kind of wage theft is pervasive across the industry.
“In all the years that I’ve been doing this, this is so rampant that I automatically assume that there’s wage theft,” she said. “It’s really sad … in my experience, the business model is based on wage theft—how to cut corners.” In some cases, Avila said, the wage theft manifests when a company misclassifies its workers as independent contractors; in other, more blatant cases, companies simply do not pay their workers for their hours.
Because the company operates through so many subsidiaries and under so many different names, it’s difficult to gauge the full extent of this legal landscape, but The New Republic has identified at least a dozen federal lawsuits against the company over the last five years. Together, these lawsuits seem to reveal that LHC’s company-wide policies regarding overtime pay have exposed it to legal trouble in several states.
Many of these lawsuits have concerned the federal law that governs overtime pay and contained allegations similar to those brought by Wiemerslage. In one lawsuit from April, a nurse named Marjorie Stone who worked for LHC-affiliated Cambridge Home Health Care, accused the company of refusing to grant her overtime pay when she worked more than 40 hours a week. The lawsuit claimed that Stone and numerous other employees had been denied proper overtime as a result of “company-wide payroll policies and practices.”
Another lawsuit, filed in 2019 by a medical coder working at an Almost Family office in Texas, alleged that the company improperly classified employees as exempt from overtime in order to avoid paying them extra when they worked more than 40 hours a week. A clinical assistant in Colorado made a similar allegation last year, claiming to be the victim of a “systematic, company-wide failure to timely pay … proper overtime compensation.”
In all these cases, the allegations hinge on the company’s hodgepodge of employee classifications and pay structures: Some employees are paid a salary, others are paid hourly but not for the time it takes them to travel to visits, and others are paid a piece rate for each visit they make to a patient’s home. This patchwork of pay structures is common among large home health companies and bears more than a passing resemblance to the myriad employee classifications used by the companies that make up the so-called gig economy.
Meanwhile, public record requests made by The New Republic to state labor departments reveal dozens of wage complaints filed by individual employees against LHC-affiliated companies, and a database maintained by the U.S. Department of Labor records several more wage claims made against LHC and its subsidiaries. In an exemplary case, an employee named Helen Sosa in Washington state said she often worked as many as 58 hours a week but that the company had neglected to pay her overtime.
The employees who filed wage theft claims against LHC were almost certainly not the only victims of the company’s pay practices: Research from Rutgers University found that as many as 57 percent of domestic care workers in New Jersey may have been victims of wage theft. The study concluded that the vast majority of wage theft in the state goes unreported.
Sometime in March 2019, a surveyor with the Florida Agency for Health Care Administration showed up at the home of a woman in Tampa. The woman was a patient at SunCrest Omni, a local home health agency that provides nursing and cleaning services to people who are bedridden or homebound.
The surveyor, who was visiting the patient as part of an audit of SunCrest’s business practices, was met by the patient’s legal guardian. The guardian pleaded with the surveyor for help.
“Maybe you can help me,” she said, according to a Department of Health and Human Services document summarizing the inspection. “I have repeatedly talked with [SunCrest] and told them about my concerns that I am not getting the services needed.” The patient’s guardian said she was working to pay off two mortgages and wasn’t able to care for the patient and her husband, who was also bedridden.
“[She] has progressed to the point where she cannot be left alone for a minute.… She has lost the [redacted] to swallow and she has choked several times,” the patient’s guardian said. “I have asked if she is eligible for additional services like home care. Would they not fill in some of these hours? I just wish I could get someone to call me.”
The same surveyor later made a home visit to another SunCrest patient, who had been in multiple car accidents. That patient told the surveyor, “I have told the office and my aide several times that I need more help.… It is frustrating!”
When the surveyor reviewed the records for yet another patient, they discovered something even more disturbing: “Caregiver arrived to find the patient on the floor. Was able to get assistance from the neighbor to help get the client … up.” It wasn’t clear from the records how long the patient had been on the floor before the caregiver arrived, or if the fall had impacted the patient’s medical care. The surveyor later visited that patient at their home and learned from the patient that SunCrest had not sent a nurse to check on the patient after their fall.
All told, the surveyor reviewed records and case histories for seven patients at the SunCrest office in Tampa and found that in four out of those seven cases, the office had failed to deliver adequate home health care to its patients. When the surveyor confronted an agency administrator about the issues, the administrator blamed the facility’s troubles on a lack of capacity: The surveyor wrote in the inspection summary, “An interview with the administrator … revealed that sometimes the aides call out and that [managers] are unable to staff [the cases]. She confirms that the clients did not receive all hours of service.”
The inspection results were recorded on a document called a Form 2567, which is used by the Centers for Medicare & Medicaid Services to track deficiencies in home health providers. A New Republic analysis of hundreds of these forms reveals the consequences of LHC’s decision to pump up patient numbers while trimming staffing. In facilities across the country, overworked aides and nurses are cutting short or missing their patient visits, leading to dangerous lapses in care.
In Florida alone, The New Republic identified at least 50 cases where LHC-affiliated agencies missed a patient visit, leading surveyors to cite these agencies for a failure to deliver care according to a doctor’s orders.
When an agency administrator at a SunCrest location in Clearwater was asked why the agency had missed five patient visits in a single week, the administrator said the office simply hadn’t had any aides available: “We do the best we can to staff the cases, but sometimes we just do not have enough staff,” the administrator told the health department. At another LHC-owned agency in Sarasota, an employee responsible for scheduling care visits gave a similar explanation when asked why records showed the agency had missed three or more visits for multiple patients: According to an inspection summary, the agency’s case coordinator “said they had been having staffing issues and were not providing visits as ordered.”
In some cases, these breakdowns in care can prove fatal. In late 2014, at an Almost Family–owned agency in Jacksonville, Florida, nursing aides missed six visits to a single patient over a two-week period leading up to that patient’s death.
The patient was a man in his eighties with a battery of health conditions, including gangrene. After experiencing health problems in mid-December, he was treated at a hospital, then released back into the agency’s care and received a health assessment from an agency nurse.
Starting on December 29, however, the agency missed six consecutive visits to the patient’s home. On January 9, the patient was found dead of unknown causes.
In an evaluation of the agency’s role in the death, the state surveyor found agency records detailing “several problems with managing the caseload”—one employee, for instance, wrote that the agency received “100 referrals a week with no identified person to take ownership—whoever picks up the phone or checks the fax, work [sic] the referral. Multiple service failures due to this.”
A few years later, LHC merged with Almost Family and absorbed the agency.
Early in November 2020, as the number of daily coronavirus cases swelled to new heights, LHC’s CEO Keith Myers got on an earnings call to deliver some good news.
“We continue to see a new normal in referral patterns,” he said, “one where patients, families, physicians, discharge planners, and other referral sources are increasingly choosing … in-home health care services” over nursing homes and other care settings. The coronavirus pandemic, he said, had provided “unique opportunities to demonstrate our range of capabilities and potential,” and that had been reflected in investor dividends: In the summer of 2020, after years of consistent gains, the company’s stock surged to an all-time high. (Myers had already received more than $4.5 million in total compensation in 2018.)
Myers also touched on the company’s ongoing trend of mergers and acquisitions: In the previous six months alone, the company had acquired home health agencies in Georgia and South Carolina, as well as hospice locations in Texas and Colorado. During the prior quarter, LHC had also absorbed a few home health offices from a nonprofit operation in Florida.
“Our organic growth is accelerating,” added the company’s president, Joshua Proffitt, adding that “our inorganic growth has only scratched the surface”—in other words, both the company’s patient rolls and its acquisition opportunities were increasing. “This historic consolidation opportunity we have been anticipating in home health is materializing now that the government stimulus is wearing off for some smaller agencies,” Proffitt added, signaling a focus on gobbling up smaller and struggling agencies.
Over the coming decade, aging demographics and the fallout from the pandemic will likely contribute to an even further increase in LHC’s growth and, more generally, to a trend of consolidation in the industry overall. The federal revenue sources that fund the Medicare program, meanwhile, will only keep the program solvent through 2026, which means Congress will either need to raise new funding or cut back on how much it pays companies like LHC.
LHC and its major peers, then, have built their business model on a bet: By cutting labor costs wherever possible, they can turn stagnant Medicare revenue into big-time profits. But if the experiences of LHC employees and clients are any indication, that strategy comes at the expense not only of the workers who make the company run but also of the patients the company is supposed to be caring for.
For Donna, the nurse in north Florida, the company’s increased demands eventually became too much. She and her fellow nurses complained to their supervisors, who sent their complaints up the corporate ladder. Nothing ever changed.
Donna herself later became sick with a chronic illness and soon found she could no longer keep up with the company’s workload. Her bosses were understanding about her sickness, but she has since retired.
“A few of us nurses bucked at the changes in leadership, because we felt [patient] care and consistency was affected,” she told me. “I know every agency is a ‘business’, but … it’s about people.”
The reporting for this story was supported by a grant from the Fund for Investigative Journalism.