The CEO Of This Nursing Home Received a $5 Million Dollars Bonus Even Though Thousands At This Nursing Home Chain Have Died
As COVID-19 took a deadly toll among residents of Genesis Healthcare facilities, the financially troubled company gave CEO George Hager Jr. a $5.2 million “retention payment.”
At the helm of the large U.S. nursing home chain during a pandemic that has killed more than 1,500 of its residents and threatens to push it into bankruptcy, Hager received the bonus in late October. He then resigned from the for-profit company, where he had served as chief executive for 17 years, less than three months later, earlier this month.
Nursing homes account for a sizable portion of the more than 419,000 U.S. COVID-19 deaths, and outbreaks at Genesis facilities caught the attention of lawmakers over the summer. “More than 1,500 Americans have died and many more have been infected at facilities owned by your company, with at least 187 of your facilities reporting cases of the coronavirus,” members of a House panel looking into the impact of COVID wrote Hager in June.
The toll at Genesis reportedly nearly doubled in the second half of 2020, with 14,352 confirmed cases among its residents and 2,812 deaths as of December 20, according to the Washington Post. An analysis of Medicare data by the news outlet found almost all of Genesis’ nursing homes running short on personal protective equipment up until late November, after the company’s board had signed off on Hager’s bonus.
Genesis did not respond to requests for comment from CBS MoneyWatch.
In a regulatory filing in November, the company said its first report of a positive case of COVID-19 in one of its facilities occurred on March 16, 2020. Since then, 266 of its 360 nursing facilities and assisted living communities had reported positive cases among patients and residents, the filing stated. More than 70% of those cases occurred in five states — Connecticut, Maryland, Massachusetts, New Jersey and Pennsylvania — with those facilities representing 45% of its beds. Genesis operates in 24 states.
Hager was also running the Kennett Square, Pa.-based chain when it agreed in 2017 to pay the federal government nearly $54 million, partly for providing “grossly substandard nursing home care” at multiple facilities. Genesis denied the allegations, some of them involving events that occurred at nursing homes before they’d been acquired by the company.
In financial distress for years, Genesis has cautioned its investors since the summer that the pandemic had worsened matters to the point where it might have to file bankruptcy.
“The virus continues to have a significant adverse impact on the company’s revenues and expenses,” Hager stated in a November 9 earnings release in which the company reported a net loss of $62.8 million for the third quarter of 2020. Government stimulus in the third quarter fell almost $60 million short of the company’s COVID-19 costs and lost revenue, he said.
“There is no question Genesis will need ongoing support from the federal government and our capital partners to sustaining operations,” Hager told an earnings call that day.
For the first nine months of last year, Genesis reported a loss of $96 million, a period in which it was given $254 million in federal aid related to COVID-19, as well as commitments of $85 million from some of the states where it does business.
With Hager continuing as a consultant, board chairman Robert Fish has taken over as Genesis CEO.