Wanaque center gets millions in taxpayer funds to care for NJ’s fragile children

At the heart of the tragedy unfolding inside a long-term care center in Wanaque lies a paradox.

A private, for-profit business is paid millions each year in taxpayer funds to shoulder a sacred public trust — the care of children so medically fragile that most can’t even speak up when something goes wrong.

Eleven of those children have died and 23 others have been sickened at the Wanaque Center for Nursing and Rehabilitation since Sept. 26 in one of the nation’s worst-ever outbreaks of adenovirus.  

The institution at the center of this storm is part of a small chain of nursing homes in New Jersey and Pennsylvania. It receives millions in public dollars annually to care for children who were injured in near-drownings or catastrophic falls; who were born too early; who suffer from cerebral palsy or congenital syndromes that render them unable to eat or even breathe on their own.  

Now nearly half of its pediatric patients have become ill with a virus that is life-threatening to those, who, like them, have compromised immune systems. 

New Jersey Medicaid spends more than $55 million annually — $7 million of that at Wanaque — on the medical needs of the 216 children who require the around-the-clock care that such facilities provide. That is more than $250,000 for each child. Some of the children living in New Jersey nursing homes come from New York , and the Medicaid program there pays for their care.  

The Wanaque center is one of four long-term care centers in the state — and one of two that operate on a for-profit basis — that provide this type of care. 

The other for-profit center, the Voorhees Pediatric Facility in Camden County, is trying to control its own outbreak of a milder strain of adenovirus. Eight children have been sickened there, though none have died. The nonprofit Children’s Specialized Hospital, a part of RWJBarnabas Health, runs two smaller centers in Mountainside and Toms River.

On Wednesday, the state Health Department ordered all admissions at the Wanaque center to cease, saying that problems with hand-washing and infection control posed an "imminent and serious risk of harm" to the residents. 

Financial pressures

New Jersey Medicaid pays these facilities about $518 a day for each child’s care — a flat rate regardless of whether the child depends on a ventilator, a feeding tube, neither or both. Those payments stop, however, when a child is transferred to a hospital.   

Some parents have complained that the Wanaque center delayed in sending their children to a hospital when they became sick.  

One mother said she had to insist that her 18-year-old daughter be sent to a hospital to be evaluated after she noticed during a visit that her daughter, who is in a vegetative state, had respiratory secretions. In her daily call the following day, she learned that her daughter had a fever. 

"But they kept saying that she was doing OK," said the mother, who asked that her name not be published to protect her family's privacy. "They said they were giving her Tylenol for the fever and were going to give her a chest X-ray. But I kept telling them that she needed to be taken to a hospital." 

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Her daughter was admitted on Nov. 5 to St. Joseph’s University Medical Center in Paterson, where doctors determined that she had contracted adenovirus. Her oxygen level fell, she spiked a fever and developed pneumonia before being stabilized.   

The deaths and hospitalizations of so many children have clearly reduced reimbursements to the Wanaque center. Thirty of its 92 pediatric beds were empty as of Wednesday, along with 10 of its 135 adult beds, based on figures from the Health Department. 

In addition, the center has been ordered to stop admitting children to its respiratory unit until the state lifts its enforcement order. Admissions to its regular pediatric and adult units must also cease until the center retains two consultants, a certified infection control practitioner and a physician who is board-certified in infectious diseases. The state ordered that those experts be hired by noon on Friday. 

The center also faces at least one lawsuit, filed by Paula Costigan, a Morris County woman who alleges that her 14-year-old son, William T. DelGrosso, became critically ill with adenovirus. The lawsuit alleges that the center was negligent in the care it provided and that it failed to communicate adequately with patients’ families. Law firms are advertising for additional clients. 

A spokesman for the center declined to comment.

Short staffing?

Since the current owners took over in 2014, the number of full-time paid employees at the center has dropped by 10, to 240 from 250, while the bed count has remained the same, according to cost reports on the Wanaque center from the Centers for Medicare and Medicaid.  

One parent said she has noticed a decline in the quality of care at the center following the change in its ownership. She asked that her name not be published. Her child, who is non-verbal and in a wheelchair, has lived at the center for years.   

This mother said she has found her child in double-diapers, a shortcut used to control odors and reduce the frequency of diaper changes. The facility has been under-staffed, and her child has fallen behind on medical appointments, she said. “Nurses have quit because the new people took over,’’ she said. Certified nursing assistants, she added, "left because new people took over. The place went downhill.”  

The parents of Dorcase Dolcin, a 4-year-old who died in the current outbreak, also complained about double-diapering.  

"It is negligence because they don't take full responsibility for what happened over there," said Ocroimy Dolcin, the girl's father. "They're just satisfied to make money, not to take care of the sick people."

Workers “have expressed serious concerns over worsening staffing levels, lack of adequate supplies and severe cutbacks to job standards,” since new for-profit owners took over, Ron McCalla, vice president at large of SEIU1199, said in a statement at the beginning of the outbreak. The union represents 136 nursing assistants, housekeepers, laundry aides and dietary aides at the Wanaque center. 

Complaints have also surfaced about care for the elderly patients at the center.  

In a lawsuit filed last year, a woman alleged that the nursing home's negligent care caused the death of her mother, Juliette Grayson, 78, of Paterson.She died in November 2015 as the result of a severe pressure ulcer, or bedsore, on her back, the lawsuit said.   

Eugene Dorio, 66, who uses a wheelchair because of diabetic neuropathy, was a patient at the center for two months ending in October. He said that the quality of care provided was poor  and the rooms unsanitary, and that many patients, including himself, were left unattended for long periods. He subsequently was transferred to another nursing home in Hackensack. 

“There was a smell of waste there that I couldn’t believe,” he said of the Wanaque center. The bedrooms and common rooms were not thoroughly or frequently cleaned, he said.  

“They were always complaining that they were short-staffed,” he said. “It seemed like every day they were short-staffed.”  

Dorio fell twice in the bathroom but did not suffer any lasting injury. He said he once sat for 10 hours in a full diaper that soaked through his clothing; no staff member had checked the diaper. Other residents, who were non-verbal, were often left for long stretches of time, he said.  

“I’m an adult. I have my mind. I have my eyesight,” he said. “You’re not pulling anything over on me." Referring to the other residents, he added, "Most of these people didn’t have all that.” 

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For-profit ownership

Publicly available information suggests that the Wanaque center does not produce large profits. According to Medicare cost reports, it recorded $199,000 in net income last year on patient service revenues of $32.7 million. The cost reports show that its net income was $667,000 in 2016 and $479,000 in 2015.  

But union leaders and advocates for nursing home patients note that the industry is rife with self-dealing. Contractual and lease arrangements that are not required to be reported can mask profit-taking, said Richard J. Mollot, executive director of the Long Term Care Community Coalition, a nonprofit that seeks to improve the quality of care for people in nursing homes and assisted-living centers.

It's impossible to determine whether such transactions have occurred at the Wanaque center from the limited information available. 

New Jersey once required all nursing-home owners to complete a lengthy disclosure form that included information about transactions with related parties, but the amount of material that centers are required to share with the state was reduced during the administration of former Gov. Chris Christie.  

"A for-profit industry which relies overwhelmingly on Medicaid and Medicare dollars for revenue ought to be transparent about how money is used," said Bryn Lloyd-Bollard, a spokesman for SEIU1199. "Sadly, this is no longer the case in New Jersey, which means our understanding of how Wanaque and other facilities do business is clouded."

The Wanaque center was purchased in June 2014 by Wanaque Real Property LLC, which leases it to the nursing home's operators, Wanaque Nursing & Rehabilitation LLC, a company jointly owned by owned by Eugene Ehrenfeld of Brooklyn and Daniel Bruckstein of Passaic. 

As a for-profit company, the center paid $355,000 in local property taxes last year. Mayor Daniel Mahler of Wanaque did not respond to inquiries about its relationship with the borough. 

The nursing home is part of Continuum Healthcare LLC, a company jointly owned by Ehrenfeld, the managing partner, and Bruckstein. The two operate seven other licensed health care facilities in New Jersey — nursing homes in Bloomingdale, Trenton, Barnegat and Galloway, and a pair of pediatric medical day care centers in Trenton and another one in Galloway. They also have nursing homes in Exeter and Warminster, Pennsylvania.

Neither Ehrenfeld nor Bruckstein could be reached. In a statement last week, the center said that it continued "to mourn for the families that have been impacted by this tragedy" and that it has "continually met all necessary standards of care."

Government rankings of the nursing homes in the chain are mixed.  

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The Health Center at Galloway and the Riverside Nursing and Rehabilitation Center in Trenton both received only one star — “much below average” — for health inspections on Medicare’s “Nursing Home Compare” website. Wanaque had two stars for health inspections. One of Continuum's Pennsylvania nursing homes had one star for health inspections, and the other had one star for staffing.

The overall rankings for Continuum’s nursing homes combine scores for health inspections, staffing and quality. They ranged from two stars (“below average”) to four (“above average”); Wanaque received two. In contrast, the pediatric long-term care facilities in Toms River and Mountainside owned by Children’s Specialized Hospital, a nonprofit arm of RWJBarnabas Health, received 5 stars. 

Payment mix is unique

The Wanaque center is unique in that it cares for both elderly nursing-home residents and children. Its license allows it to care for 92 children and 135 adults. Only 62 children — 43 in the ventilator unit and 19 in the regular pediatric unit — and 125 adults were living there as of Wednesday, the Health Department said. 

The same one-size-fits-all federal and state standards apply to long-term care facilities whether they care for children on ventilators or 90-year-olds with dementia. The state health commissioner and health care experts have asked whether that’s right.  

“The long-term needs of this population are clearly unique yet the regulations that guide reimbursement for children with medical complexity … are the same as those for the geriatric population in almost every state,” the Pediatric Complex Care Association, a group that represented a variety of care facilities nationwide, said in a 2016 report.  

It recommended that the federal government develop specific regulations for pediatric facilities and that nursing home inspectors be trained in specific criteria for pediatric facilities.  

And Dr. Shereef Elnahal, the state health commissioner, said the outbreak raises questions "about whether these general long-term care standards are optimal for this vulnerable population of medically fragile children.” 

The Health Department “is currently engaging in collaborative discussions with both federal authorities and the state Legislature on whether there is an opportunity to bolster standards for facilities that specialize in vulnerable patient populations,” a department spokeswoman said. 

The mix of residents has sometimes proved beneficial: Dorio said he would go down to the first floor once a week during his stay to read to the children.  

“I don’t know if they were understanding me or if they even knew I was there,” he said, “but they’re still kids.” To him, his small effort brought a tiny semblance of normalcy to children who seldom received visitors. “All kids like it when someone reads to them,” he said. 

The practice of having adult residents interact with children has since been discontinued. No adenovirus cases have been reported in the elderly population at the center.

Infection control challenges

Children stay at the Wanaque center for years. It becomes their home as well as their health care provider.  

It is also their school: 50 children at the center are enrolled in an on-site school with a full-time principal, seven teachers and 14 support personnel, according to the state Department of Children and Families.   

It’s likely the source of the Wanaque adenovirus outbreak will never be known. 

When teachers and staff members come and go, when families and volunteers visit, and when children are brought together in classrooms and playrooms, opportunities to introduce and spread infection abound. By the time the respiratory illness that affected a cluster of children had been identified as adenovirus, it’s possible nearly all of the children at Wanaque had been exposed.  

State health officials said the layout of the facility, and the consequent inability to segregate children with symptoms from other residents, appeared to be a factor in the outbreak's long duration. No children can be admitted to the ventilator unit until the center shows that it can separate children appropriately, according to the enforcement letter that the Health Department issued Wednesday. 

Adenovirus typically causes bad colds, sore throats, pneumonia, diarrhea, pinkeye or fever in healthy people, but the virus can be devastating for children with weakened immune systems, who are far more likely to face life-threatening illnesses as a result of their exposure to it. They have spiked fevers and developed pneumonia. There is no cure; only supportive care is possible.  

A tracheostomy — an opening in the neck to allow air to pass directly into the trachea, usually with the aid of a ventilator — is the biggest risk factor for respiratory infection among children in long-term care, according to a recent study by Dr. Lisa Saiman of Columbia University Medical School.  

Respiratory infections were by far the most common type of illness acquired by young residents of nursing homes, her study found. Factors that increased the risk of infection were: younger age, more underlying chronic conditions, and the presence of a feeding tube or a tracheostomy, according to the study, published last year in JAMA Pediatrics. 

By those criteria, the Wanaque Center’s patients were especially vulnerable.  

A turbulent history

The Wanaque center was in the spotlight once before, when it was known as the Wanaque Convalescent Center.  

In the late 1980s, it became one of the state’s largest long-term care centers for AIDS and HIV patients. In 1988, Wanaque residents, led by the borough's mayor at the time, Angelo Cutillo, staged demonstrations and filed a legal challenge to block the home from accepting such patients, expressing in the crudest terms their deep fears about the presence of gay men and former drug users in the borough. 

More than 1,000 AIDS patients ultimately passed through the facility between 1988 and 1995, when a funding dispute led to the cessation of the program. By that time, local attitudes had changed.  

Today’s patients are different. They are children like Angel, born prematurely when his mother suffered a fatal brain aneurysm during her sixth month of pregnancy. Or William DelGrosso, afflicted with a seizure disorder so severe his heart stopped during one particularly bad episode, depriving his brain of oxygen.  

A lawsuit filed anonymously in federal court in Newark by a doctor who was a whistle-blower at the center in 2014 sought to have the federal and state governments join him in a case claiming that the center was defrauding New Jersey Medicaid. 

The lawsuit alleged that the previous owners of the Wanaque Center “drastically increased the pediatric ventilator population” starting in 2003, and that the quality of care deteriorated because they didn't have the facilities or equipment, such as back-up ventilators, to support the new residents.  

The lawsuit further accused the nursing home's previous operators of packing the facility with Medicaid patients from New York State, because New York Medicaid's daily reimbursement rate was higher than New Jersey's.The management company also was billing Medicaid even when private benefits were available, according to the lawsuit. Medicaid regulations require that providers go through private insurance first. 

The federal and state governments declined to join the lawsuit. The plaintiff, represented by Jeremy Abay, a Philadelphia attorney, amended the complaint, and the case is still pending.  

Staff Writers Scott Fallon, Monsy Alvarado and Hannan Adely contributed to this article. 

Email: washburn@northjersey.com