Reveal: 'A Mountain of Misconduct' at New Hampshire Rehab
Corruption Runs in the Family at American Neurorehab Centers
by Jack Rodolico and Laura Starecheski
Everyone agreed on one thing: Jessica Klurfeld threw her liver and onions on the floor. What happened next is where the stories diverged.
Klurfeld, a woman with autism and a rare genetic disorder who was then 23 years old, said an attendant at Lakeview NeuroRehabilitation Center in New Hampshire “told me to eat off the f*cking floor.” A second staff member who witnessed the 2013 event backed Klurfeld’s story.
The attendant in question said that while Klurfeld did eat some of the food off the floor, she had not ordered the young woman to do it.
According to hundreds of confidential emails and reports shared with reporters, this was one of dozens of incidents that worried Klurfeld’s mother, Linda Blumkin, a retired antitrust attorney living in New York City, 320 miles away. Blumkin pleaded with New Hampshire regulators to look into her daughter’s treatment at Lakeview, a facility near the Maine border – a place so remote that staff simply called it “The Mountain.”
State inspectors already knew a lot about Lakeview’s problems. Since the mid-1990s, they had been warned about fraud, abused clients, falsified records, medical negligence and aggressive marketing to vulnerable parents. They even knew about the suspicious death of one Lakeview client in 2012. But they did not crack down until a disability rights watchdog group published the details of that death in a 2014 Report, which also detailed the systemic abuse of other clients.
New Hampshire Public Radio and Reveal found a history of not just mistreatment, but also violence, abuse and sexual assaults at Lakeview based on an extensive review that included six years of 911 call logs, hundreds of pages of reports from states and watchdogs, and interviews with dozens of former staff members, inspectors and families. That review also uncovered Lakeview’s connections to a network of similar facilities across the country – and to owners who have evaded accountability for 40 years.
New Hampshire became the first state to close its public institution for people with disabilities in 1991. Twenty-four years later, all states still struggle to provide the support that those with the most complex conditions need to remain in their homes. Families have little choice but to send their children to remote, for-profit facilities that receive scant oversight – unaware of their track records of abuse and fraud allegations.
Klurfeld had lived in out-of-state facilities since her late teens. Blumkin said she could not handle her daughter’s unpredictable and sometimes aggressive behavior at home. Lakeview had promised to provide special education and intensive behavioral therapy for Klurfeld, one of up to 88 clients with some combination of brain injuries, intellectual disabilities, mental illnesses and behavioral problems.
“Basically, we felt deceived,” Blumkin said. “We felt that Lakeview had made promises to us that not only did they not keep, but it’s inconceivable to me that they could have had an honest intention that they ever would keep them.”
Klurfeld languished at Lakeview for three years while her mother searched for an alternative facility in her home state, New York. Blumkin’s struggle is typical of Lakeview families. Parents from as far away as Oregon and Hawaii sent their children to the New Hampshire facility as a last resort when they had no option close to home. Even family members interviewed who were happy with Lakeview said that, given more choices, they would not have opted to send their children so far away.
“We do need a spotlight on these places and this trafficking of people,” said Curt Decker, executive director of the National Disability Rights Network. “There’s this crisscrossing (between states). This is what leads to, if not abuse, certainly neglect of these kids who have serious disabilities and need specialized services.”
A ‘High-Priced Homeless Shelter’
Lakeview marketed itself as a place that took clients no one else would. State agencies across the country sent people who often had a combination of developmental disabilities, medical conditions and mental illnesses. Many states spent millions, yet did little to ensure that their clients received adequate treatment at Lakeview – or that taxpayers were getting their money’s worth.
Medicaid footed the bills for Kory Horion, who went to Lakeview for a short stay in 2012. Seventy-two days later, he was dead.
Horion, a New Hampshire resident, was 22 and had Asperger’s syndrome and a seizure disorder. According to a report from the Disability Rights Center-New Hampshire, Horion’s health declined quickly at Lakeview. He lost about 6 pounds a week and stopped taking his antiseizure medication.
Horion’s identity was hidden in the report, which referred to him only as “J.D.” But his grandmother Linda Anderson agreed to make his name public for this story. She said Lakeview did not tell her about her grandson’s worsening health. She said she spoke to him a few days before he died.
“He was just making this awful sound in the phone,” she said. “He couldn’t even talk. It sounded like he was without his medication.”
On Sept. 23, 2012, Horion had a grand mal seizure. At least four times that morning, Lakeview staff saw him on the floor, naked and nearly comatose, in a puddle of urine. But they did not call for help. He was pronounced dead when he got to the emergency room.
The Disability Rights Center report prompted investigations by the state of New Hampshire, which concluded that Lakeview’s staff was overworked, underpaid, undertrained and largely unsupervised.
In 2014, the facility grossed $21.5 million in revenue, $6 million of which was profit. A report from the same year by the state of New York – initiated by Blumkin’s complaints – found that Lakeview was billing for services it was not providing. Blumkin shared the report with reporters on the condition that it not be published.
Lakeview’s senior staff declined all requests for an interview, but a spokesman did respond to some questions by email. He said Lakeview charged an average of $292,000 per client per year. The facility operated one of the state’s most expensive special education schools on its grounds, according to the state’s Department of Education. And most of the money came from Medicaid and public education coffers.
“They didn’t want people to leave; they didn’t want them to get better,” said Danny Adams, a former weekend manager at Lakeview. “The plan was to keep them there and continue to collect their money and do that as cheaply as possible.”
In an interview with NHPR and Reveal, former staff psychologist Maurice Regan called Lakeview “a high-priced homeless shelter.”
Long before Lakeview, this particular type of scenario – institutions providing minimal services for the highest-paying clients – was perpetrated by executives across the nursing home industry. In the 1980s, pioneers in the then-new and lucrative brain injury rehab industry adopted the same practices. In fact, the NHPR/Reveal investigation found that some of the people at the center of those controversies were the very people who founded the New Hampshire facility.
The Man who Built ‘The Mountain’
The Lakeview property originally was the vacation home of the Brennick family. In the late 1970s, the Brennicks converted the home – with its gorgeous view of lakes and mountains – into a neurological rehab center called Highwatch. The Brennicks had their roots in nursing homes – an industry plagued by corruption, fraud and abuse in the 1960s and ’70s, when patriarch Charles Brennick ran a chain of a few dozen homes in New England called Medico.
Brennick’s nursing home business went south in the mid-1970s, on the heels of a national scandal over poor care across the industry. He attempted to rescue Medico with an unorthodox strategy: He lugged suitcases full of cash to Las Vegas, sometimes $1 million at a time, attempting to gamble his way out of bankruptcy.
By capitalizing on a wave of brain injury survivors, thanks to developments in emergency medicine, Brennick built the nation’s largest chain of rehab centers: more than three dozen New Medico centers across 15 states. Highwatch in New Hampshire was one of them. The facilities offered intensive physical therapy, speech therapy, job training and more, at a cost of about 10 times the amount nursing homes typically charged, according to Sue Bessette, a former nurse and independent investigator who helps prosecute nursing home fraud and abuse cases. The company reportedly grossed about $350 million in 1989.
“If you looked at what they were offering … it sounded like heaven. It was wonderful,” Bessette said.
But allegations of abuse, neglect, Medicaid fraud and unethical marketing practices spanned the nationwide New Medico chain. In 1992, Congress investigated the $10 billion brain injury rehab business, with Brennick’s company receiving the most scrutiny.
State investigators and whistleblowers detailed a complex profit-seeking strategy in a 1992 congressional hearing. New Medico sent marketers into intensive care units to recruit potential patients. The final congressional report called these recruiters “ambulance chasers in the classic sense.” New Medico’s patients were kept as long as insurance companies would cover their care, then discharged, regardless of their recovery progress.
The company pushed families to send patients far from home, even when there was a New Medico center in their state. This out-of-state treatment allowed New Medico to bill Medicaid at higher rates, netting hundreds of dollars more per patient each day, according to the congressional investigation.
In 1991, for instance, 400 New York residents with brain injuries were being treated outside of New York, even though New Medico operated several facilities in the state. The out-of-state care cost New York millions. The NHPR/Reveal investigation found that this crisscrossing of patients between states would endure, becoming a hallmark of today’s neurological rehab circuit.
The FBI raided New Medico’s headquarters in Lynn, Massachusetts, and the company’s Highwatch site in Effingham, New Hampshire, in 1992. At the time, it was the largest raid in the Boston FBI field office’s history. At New Medico’s headquarters, investigators pulled out 750 boxes of documents over eight days.
Despite “considerable indication of fraud and abuse within the New Medico organization,” FBI investigators said they could not prove that the company’s top officials – including Brennick – operated with criminal intent. Brennick was not indicted, nor were any other senior staff members.
But the investigation took a toll on the company. Brennick sold off his facilities one by one. Most went to his business partners, another move in the tradition of the nursing home industry, in which, for decades, tight circles of interconnected business associates shared stakes in multiple companies and helped each other make money. It was legal most of the time, but hard for regulators to trace.
Brennick co-owned New Medico with his attorney, Barry Portnoy. Portnoy, along with Brennick’s cousin Gerard Martin, financed much of the New Medico empire through a real estate investment trust.
After New Medico collapsed, Brennick’s fortunes sank, while Portnoy and Martin went on to much larger ventures. The two co-founded a massive nursing home company, Five Star Quality Care. Portnoy and his son operate a collection of real estate investment trusts that, as recently as 2013, were valued at $25 billion.
A columnist for The Boston Globe once referred to the pair as the “poster family for bad corporate governance.”
The Brennick style of running neurological rehab centers lived on, however, both at Lakeview in the family’s former Highwatch facility and at the Florida Institute for Neurologic Rehabilitation, known as FINR.
That Florida facility is run by Charles Brennick’s son, Joseph.
The Mountain Versus the Swamp
For people with the most complex disabilities, states struggle to provide community-based care, according to the most recent federal data.
In 2009, there were 32,909 Americans with developmental and intellectual disabilities living in public institutions across 41 states. As of 2012, another 56,303 lived in nursing homes and other large, private institutions.
Joan Beasley, a disabilities expert with the University of New Hampshire, said states have not only privatized the institutional care of the most vulnerable Americans, but also do not properly regulate these private facilities.
“We do not need more institutions. We need more community capacity,” she said.
Beasley travels the country advising states on how to treat people with the greatest needs – indeed, the very people who are most likely to wind up at Lakeview in New Hampshire or FINR in Florida. She bristles at the suggestion that people with disabilities need to be in restrictive settings because they are deemed violent or aggressive.
Instead, she says, people who cannot obtain mental health services and other community support are the most likely to be institutionalized.
For example, a person with both autism and bipolar disorder needs to transition smoothly through a continuum of care, especially in a crisis. That individual may need to move from a psychiatric hospital to a rehabilitation center, then to a group home, then back to his or her family home or an apartment with support staff. All states have aspects of this care, but no state provides the full spectrum for everyone in need all the time. If one thread of the safety net breaks, the state is more likely to ship the person to a place like Lakeview or FINR.
That was the case for the son of Jim and Ginger Wright of Henniker, New Hampshire. The couple describe their son Derek, who has autism, as “high intensity, low frequency.” They say his aggressive outbursts are explosive but hard to predict. He failed out of his public school’s special education program, sending him to a series of institutions that could not seem to control his behavior. The Wrights say New Hampshire officials warned them that their son needed to be in an institution to receive state funding past the age of 21 – when he would age out of the public education system.
“They told us our options were FINR in Florida, Lakeview or keep him home with no services and no funding,” Ginger Wright said.
The Wrights wanted Derek to be close to home, so they chose Lakeview in 2014. They say their son lost 80 pounds in about 16 months there, and they maintain that the staff turnover was so high that Derek received no actual treatment. The couple call their son “Mr. Clean” because he loves water and long showers. But they said they often found him dirty and unhappy when they visited Lakeview on weekends.
Odds are he would not have fared better in Florida, where his parents would have seen him far less often.
Like Lakeview, FINR is a sprawling campus set on hundreds of acres. But unlike Lakeview’s picturesque views of lakes and mountains, it is surrounded by gator-infested swampland. Claims of fraud and abuse have plagued the facility and its owner, Joseph Brennick. Brennick has fought at least four lawsuits over patient deaths.
In 2014, FINR settled a lawsuit with Allstate Insurance Co. that claimed the institution warehoused patients for years, providing little or no actual rehab. Allstate alleged that it had paid the facility $7.6 million in fraudulent claims over almost a decade.
One of the most disturbing stories from the Florida facility came from a 2008 investigation that prompted the District of Columbia to pull all its 21 clients, half of them foster children. Staff members were having trouble weighing a Washington, D.C., resident because he was obese. So they took the patient to a livestock market every month to be weighed.
Joseph Brennick said skeptical families should survey their options and choose the facility with which they are comfortable.
“Come on down and tour,” he told NHPR and Reveal when asked what he tells families that might need reassurance about the facility’s reputation. “Look at your options. Go tour other facilities. See what they offer you. See if they’re even willing to take you.”
Derek Wright is now in a New Hampshire group home two hours from his parents. They are happy with his care, but they wish he were closer.
Weak Regulations and Licensing
When they do send a loved one across state lines, families rely on local regulators to inspect and license health care facilities. Again, Lakeview and FINR offer a cautionary tale about the diligence of those regulators.
A 2015 report ordered by New Hampshire Gov. Maggie Hassan that examined four years of Lakeview abuse complaints found that state inspectors sometimes cited low-level staff by adding their names to a state registry of abuse, neglect and exploitation offenders, but they never addressed systemic abuse at the remote facility.
Meanwhile, inspectors from the Health Facility Licensing Unit had the power to fine Lakeview or revoke its license for failing to keep clients safe. The governor’s report said the unit’s inspectors “found egregious concerns about Lakeview that may have warranted closure and no action was taken.”
The report also concluded that “the Licensing Unit is not held in high regard in the community because it is not perceived to be diligent or rigorous.”
That may be because, as the report also found, licensing inspectors simply did not have the expertise to identify problems at Lakeview, a facility that had little in common with the others they oversee, including laboratories, nursing homes and – coming soon – medical marijuana dispensaries.
Since the news about problems at Lakeview broke in 2014, New Hampshire regulators say they have implemented changes, including rewriting the rules governing residential treatment and rehabilitation centers and improving communication among agencies with oversight of the same facilities. Still, the state has a daunting mandate: to oversee 1,000 health facilities, 350 of which need annual inspections, with only three investigators.
In the case of Joseph Brennick’s Florida facility, FINR fits into its own narrow licensing category: transitional living facilities. Only about a dozen centers in the state fall under this license, with Brennick’s facility by far the largest. This category, unlike hospitals and nursing homes, is not regulated by federal laws on patient safety and basic rights like confidentially and consent.
Beginning in 2012, Disability Rights Florida detailed concerns that state regulatory standards were too weak to protect FINR’s clients from abuse and neglect. New state legislation passed last spring, vastly expanding the licensing requirements. FINR has until July 2016 to comply.
Licensing aside, Lakeview and FINR both gained credibility through The Joint Commission, an independent nonprofit organization that accredits nearly 21,000 health care facilities nationally. Families looking for a place for their loved one can note the impressive-looking Joint Commission gold seal on the websites of both institutions. But that does not guarantee patients will receive good care, says Curt Decker of the National Disability Rights Network.
“We’re constantly finding fraud, people stealing money, who are licensed and accredited,” he said.
Lakeview in New Hampshire, for instance, remains accredited by The Joint Commission – even though it has now been shut down.
'The Dumping Grounds'
Finally this summer, New Hampshire regulators forced Lakeview to close amid more scandals over lost clients, an alleged client-on-client rape and a staff member finding a gun in a break room.
Many disabilities advocates saw the facility’s closing as a victory. But the reality is more complicated. Suddenly, about 60 clients from about 10 states needed new homes. And without Lakeview, vulnerable people with disabilities have started to show up in jails, nursing homes and psychiatric hospitals.
“States rely on the few programs in the nation such as Lakeview because of the lack of sufficient community based alternatives,” concluded a report from Gov. Maggie Hassan’s office. “States’ plans to use facilities such as FINR merely serve to ignore the lack of community capacity and continue families’ uncertainty.”
Linda Blumkin, the mother of former Lakeview patient Jessica Klurfeld, put it more bluntly.
“The problem is that the Lakeviews and the FINRs are the dumping grounds,” she said. “Those are the places of last resort where our states put people when they don’t have anything really appropriate for them.”
State officials tell NHPR and Reveal that New Hampshire is trying to recruit reputable companies to work with the state’s most challenged individuals in community settings, not institutions. Until that system is fully built out, and with Lakeview now closed, it is relying on a controversial out-of-state facility: FINR.
New Hampshire currently has 11 people with intellectual disabilities at Joseph Brennick’s Florida facility.
Meanwhile, after years with little oversight, Lakeview is reeling from a multistate crackdown on its operations. Until May, Lakeview Management Inc., the parent company of the New Hampshire facility, also ran a small center in Pennsylvania. Regulators shut it down abruptly amid safety concerns, including findings that staff drugged clients to control their behavior. That leaves Lakeview Management with one facility in Wisconsin – the former home of another of the Brennicks’ New Medico centers.
Even though Lakeview’s New Hampshire campus was empty at the end of the summer, it turns out that its executives have not given up on the business.
In August, Lakeview protested its closure in a letter to the state’s Department of Health and Human Services.
“Lakeview does not intend to ‘close’ its facility voluntarily,” the letter reads. It also called the Disability Rights Center report inflammatory, stating it was “based largely on an incident that occurred almost two years prior to publication of the Report.”
That incident was the death of Kory Horion.
As regulators shut down the facility, including the special education school on The Mountain, Lakeview’s CEO, Christopher Slover, created a new company called National Neuro Inc., according to the New Hampshire secretary of state’s office, and gave the Lakeview school a new name: Green Mountain Academy.
National Neuro proposes to operate at the same address as Lakeview, employ the same senior staff – including a former New Medico employee – and work with the same patient population: clients from around the country with autism, emotional disturbances, intellectual disabilities, brain injuries and “other health impairments.”
The New Hampshire Department of Health and Human Services, citing state licensing laws, would not confirm that National Neuro had applied for a license. However, the Department of Education, beholden to a different state law, acknowledged that it received an application from Slover’s new company – for the same special education license Lakeview had just lost.
The education department has rejected the 1,000-page application, citing its confusing references to multiple company names: Lakeview, Green Mountain, National Neuro. It encouraged National Neuro to get more organized before reapplying.
A Mountain of Misconduct
This story is featured on the November episode of "Reveal," a new investigative public radio program and podcast produced by The Center for Investigative Reporting, a nonprofit newsroom based in California, and PRX. Subscribe to the podcast and learn more atwww.revealnews.org.
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