By Jordan Rau and Irena Hwang, KFF Well being Information
Rehab hospitals that assist individuals get well from main surgical procedures and accidents have develop into a extremely profitable slice of the well being care enterprise. However federal knowledge and inspection stories present that some run by the dominant firm, Embody Well being Corp., and different for-profit firms have had uncommon however critical incidents of affected person hurt and carry out under common on two key security measures tracked by Medicare.
But even when inspections reveal grave circumstances of damage, federal well being officers don’t inform customers or impose fines the way in which they do for nursing properties. And Medicare doesn’t present easy-to-understand five-star rankings because it does for basic hospitals.
In essentially the most critical issues documented by regulators, rehab hospital errors concerned affected person deaths.
In Embody Well being’s hospital in Huntington, West Virginia, Elizabeth VanBibber, 73, was fatally poisoned by a carbon monoxide leak throughout building on the facility.
At its hospital in Jackson, Tennessee, a affected person, 68, was discovered lifeless in a single day, mendacity on the ground in a “pool of blood” after an alarm that was purported to alert nurses that he had gotten away from bed had been turned off.
In its hospital in Sioux Falls, South Dakota, a nurse gave Frederick Roufs, 73, the incorrect drug, considered one of 26 remedy errors the hospital remodeled six months. He died two days later at one other hospital.
“I can still see Fred laying in the bed as they shut each little machine off,” stated his widow, Susan Roufs. “They clicked four of them, and then the love of my life was gone.”
Embody, which owns 168 hospitals and admitted 248,000 sufferers final yr, has led the transformation of this area of interest trade. In 2023, stand-alone for-profit medical rehabilitation hospitals overtook nonprofits because the locations the place nearly all of annual affected person admissions happen, a KFF Well being Information and New York Instances evaluation discovered. A 3rd of all admissions had been to Embody hospitals. Such services are required to offer three hours of remedy a day, 5 days per week.
Throughout the nation, there are actually almost 400 stand-alone rehab hospitals, the majority of that are for-profit. These hospitals collectively generate income of 10%, greater than basic hospitals, which earn about 6%, and way over expert nursing properties, which make lower than 0.5%, in response to the latest knowledge from the Medicare Fee Advisory Fee, an impartial congressional company.
On the identical time, the variety of small, specialised models inside acute care hospitals — the place most rehab was once supplied — has dwindled. There are actually round 800 of these, and most are nonprofits.
In its newest annual report, Embody, which is publicly traded, reported an 11% internet revenue in 2024, incomes $597 million final yr on revenues of $5.4 billion.
Federal knowledge on the efficiency of about 1,100 of the rehab services present Embody tends to be higher at serving to most sufferers return dwelling and stay there. In a two-year interval ending in September 2023, Medicare rated 233 rehab services as performing higher than the nationwide price for this main metric, referred to as “discharge to community.” Most rehabs with higher neighborhood discharge charges are for-profit, and Embody owns 79 of them.
However knowledge from Medicare additionally reveals Embody owns most of the rehabs with worse charges of probably preventable, unplanned readmissions to basic hospitals. Medicare evaluates how usually sufferers are rehospitalized for situations which may have been averted with correct care, together with infections, bedsores, dehydration, and kidney failures.
Embody accounts for about 1 in 7 rehab services nationally, however owned 34 of the 41 inpatient rehab services that Medicare rated as having statistically considerably worse charges of probably preventable readmissions for discharged sufferers. (Total, charges of readmission after discharge ranged from 7% to 12%, with a median of 9%.)
And it owned 28 of the 87 rehab services — 65 of which had been for-profit — that had worse charges of probably preventable readmissions to basic hospitals throughout affected person stays. (The median for these sorts of readmissions was 5%, and charges for particular person rehabs ranged from 3% to 9%.)
Patrick Darby, the manager vp and basic counsel of Embody, strongly defended the corporate’s document in written responses to questions. He dismissed Medicare’s readmissions rankings of “better,” “worse,” and “no different than the national rate” as “a crude scoring measure” and stated “performance is so similar across the board.” He referred to as the violations discovered throughout well being inspections “rare occurrences” that “do not support an inference of widespread quality concerns.”
“The simplest and most accurate reason for EHC’s success is that our hospitals provide superior care to patients,” he stated, referring to Embody by its company initials.
Chih-Ying Li, an affiliate professor of occupational remedy on the College of Texas Medical Department at Galveston College of Well being Professions, stated in an interview {that a} analysis examine she performed discovered the revenue standing of a rehab facility was the one attribute related to increased unplanned readmissions.
“The finding is pretty robust,” she stated. “It’s not like huge, huge differences, but there are differences.”
Alarming Errors
VanBibber was admitted to Embody’ Huntington hospital in 2021 for remedy to strengthen her lungs. On the time, the hospital was present process a $3 million growth, and state regulators had warned the corporate that areas of the hospital occupied by sufferers needed to be remoted from the development “using airtight barriers,” in response to a well being inspection report.
In her room, which was about 66 toes from the development zone, she started having bother respiration, the report stated. When she advised the workers, they ignored her and shut her door, in response to a lawsuit introduced by her property. Employees members finally observed that she was “lethargic and gasping for air,” and referred to as 911.
When the emergency medical squad arrived, the carbon monoxide detectors they wore sounded. By that point, VanBibber’s blood oxygen ranges had been dangerously low, the inspection report stated. She died three days later from respiratory failure and carbon monoxide poisoning, in response to the inspection report and the lawsuit. A plumber had been utilizing a gas-powered noticed within the building space, however there have been no carbon monoxide detectors within the hallways, the report stated.
In court docket papers, Embody and its building contractors denied negligence for VanBibber’s loss of life. The case is pending.
Inspectors decided Embody failed to take care of a protected surroundings for all sufferers throughout building and didn’t correctly consider different sufferers for indicators of poisoning, the report stated.
Since 2021, the federal Facilities for Medicare and Medicaid Providers, or CMS, which oversees well being inspections, has discovered that 10 Embody hospitals, together with the one which cared for VanBibber, had rapid jeopardy violations, federal information present. Such violations — like those that Medicare additionally present in reference to the deaths of Roufs and the affected person who fell after leaving his mattress — imply a hospital’s failure to adjust to federal guidelines has put sufferers in danger for critical damage, critical hurt, critical impairment, or loss of life.
Darby, the final counsel for Embody, stated the corporate regretted any medical issues and had promptly addressed all such findings to the satisfaction of inspectors. He stated Embody that has an “excellent compliance record,” together with superior outcomes from its accreditation company, and that its total variety of well being citations was tiny given what number of hospitals Embody owns and what number of sufferers it treats.
Six different corporate-operated for-profit hospitals had been additionally cited, whereas not one of the 31 stand-alone nonprofit rehab hospitals acquired such violations from 2021 to 2024. (Inspection stories for basic hospitals don’t systematically specify through which a part of the constructing a violation occurred, so rehab unit violations can’t be recognized.)
An alert referred to as a mattress alarm was on the root of rapid jeopardies at Embody hospitals in Morgantown, West Virginia, and Jackson, Tennessee. The gadgets are pressure- and motion-sensitive and emit a sound and show a lightweight to alert workers members that somebody at a excessive threat of falls has left his or her mattress.
In its Morgantown hospital, a nurse technician found a affected person face down on the ground with a big gash on her head after a faulty alarm didn’t go off, an inspection report stated. After she died, the nurse advised inspectors: “We are having a lot of problems with the bed alarms.”
Medicare shouldn’t be licensed by regulation to superb rehab hospitals for security rule violations, even ones involving deaths uncovered throughout inspections, because it has achieved with almost 8,000 nursing properties over the past three years, imposing common fines of about $28,000.
The one possibility is to completely reduce off a rehab hospital’s reimbursement for all companies by Medicare and Medicaid, which cowl most sufferers. That step would more than likely put it out of enterprise and is sort of by no means used due to its draconian penalties.
“Termination is typically a last resort after working with the provider to come back into compliance,” Catherine Howden, a CMS spokesperson, stated in an e mail.
Because of this, as a result of there’s no graduated penalty, even essentially the most critical — and uncommon — rapid jeopardy violations successfully carry no punishments as long as the hospital places steps in place to avert future issues.
“Only having a nuclear weapon has really hurt patient safety,” stated Michael Millenson, a medical high quality advocate.
One rapid jeopardy incident did lead to a punishment, however solely as a result of the hospital was in California, which permits its well being division to concern penalties. Embody’ Bakersfield hospital paid a $75,000 superb final yr for failing to regulate the blood sugar of a affected person who died after her coronary heart stopped.
Fast Development and a Troubled Historical past
Embody has accelerated its growth in recent times and now operates in 38 states and Puerto Rico. It plans to open 17 extra hospitals in Arizona, Connecticut, Florida, Georgia, Maine, Pennsylvania, South Carolina, Texas, and Utah by the tip of 2027, in response to its newest report.
It often strikes into new markets by persuading native nonprofit hospitals to shutter their rehab models in change for an fairness stake in a newly constructed Embody hospital, firm executives have advised traders.
The president of Embody, Mark Tarr, calls it a “win-win proposition”: The native hospitals can use their emptied area for a extra profitable line of service and Embody will get a “jump start” into a brand new market, with accomplice hospitals usually referring sufferers.
Tarr, who was paid $9.3 million in compensation final yr, advised traders that Embody requires that the prevailing hospitals signal a noncompete deal. Sixty-seven Embody hospitals are joint ventures, largely with nonprofit hospitals as traders, in response to the corporate’s June monetary submitting, the latest obtainable.
Darby stated the corporate’s income enable it to construct hospitals in areas that lack intensive inpatient rehabilitation and enhance present hospitals. “High-quality patient care is not only consistent with shareholder return, but quality and shareholder return are in fact critical to one another,” he stated.
The success of Embody is especially notable provided that it barely survived what specialists stated was one of many largest fashionable accounting scandals in 2003.
The Securities and Alternate Fee charged that the corporate, then generally known as HealthSouth, overstated earnings by $2.7 billion to satisfy Wall Avenue analyst quarterly expectations, resulting in the ouster of its founder and administrators. In 2004, the corporate agreed to pay the federal government $325 million to settle Medicare fraud allegations with out admitting wrongdoing. Darby credited the corporate’s new leaders for acquiring a $2.9 billion judgment on behalf of shareholders in opposition to the corporate’s founder.
The corporate modified its identify to Embody in 2018 after buying Embody House Well being and Hospice. In 2019, the Justice Division introduced the corporate had agreed to pay$48 million to settle whistleblower lawsuit claims that it misdiagnosed sufferers to get increased Medicare reimbursements, and admitted sufferers who had been too sick to learn from remedy. The corporate denied any wrongdoing, blaming impartial physicians who labored at its hospitals. Darby stated Embody settled the case solely to “avoid more years of expense and disruption.” He stated the Justice Division by no means filed a lawsuit regardless of years of investigation.
Treatment Harms
Rehab hospital inspection stories will not be posted on Care Examine, Medicare’s on-line search software for customers. KFF Well being Information needed to sue CMS beneath the Freedom of Data Act to acquire all its inspection stories for rehab hospitals. In distinction, Care Examine publishes all nursing dwelling inspection stories and assigns every facility a star score for its adherence to well being and security guidelines.
So individuals now selecting a rehab hospital wouldn’t know that on the Embody hospital in Sioux Falls, South Dakota, in 2021, a nurse by accident gave Roufs a blood strain drug referred to as hydralazine as an alternative of hydroxyzine, his prescribed anti-anxiety remedy, in response to an inspection report. Roufs went into cardiac arrest. This kind of error, referred to as a“look-alike/sound-alike,” is one hospitals and workers members are purported to be particularly alert to.
Months earlier than, an inside security committee had recognized a development of remedy errors, together with when a nurse by accident gave a affected person 10 instances the prescribed quantity of insulin, sending him to the hospital, the inspection report stated. The nurse had misinterpret 4 models as 40. Since Roufs’s loss of life, inspectors have faulted the hospital six instances for varied lapses, most just lately in April 2024 for improper wound care.
An Embody hospital in Texarkana, Texas, misused antipsychotic drugs to pacify sufferers, leading to an instantaneous jeopardy discovering from CMS, the report stated. And the corporate’s hospital in Erie, Pennsylvania, was issued an instantaneous jeopardy violation for not protecting observe of remedy orders in 2023, when a affected person had a cardiac arrest after not receiving all of his medication, in response to the inspection report.
The federal authorities’s total high quality oversight efforts are restricted. Medicare docks fee to rehab services for sufferers readmitted to a basic hospital throughout shorter-than-average rehab stays, however not like at basic hospitals, there aren’t any monetary penalties when just lately discharged rehab sufferers are hospitalized for vital well being points.
The Biden administration introduced final yr it supposed to develop a score scale of 1 to five stars for rehab services. The trade’s commerce affiliation, the American Medical Rehabilitation Suppliers Affiliation, requested a delay within the creation of star rankings till the present high quality measures had been refined. The Trump administration has not decided whether or not it is going to proceed the hassle to price rehab services, in response to a CMS spokesperson.
Lethal Bedsores
The household of Paul Webb Jr., 74, claimed in a lawsuit that the Embody hospital in Erie left Webb unattended in a wheelchair for hours at a time, placing strain on his tailbone, in 2021. His medical information, supplied to reporters by the household, listing a sitting tolerance of 1 hour.
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Earlier than his mind bleed, a kind of stroke, Paul Webb Jr. was an lively runner. (Webb household/Webb household/TNS)
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Earlier than his mind bleed, a kind of stroke, Paul Webb Jr. was an lively runner. (Webb household/Webb household/TNS)
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Webb — who had been initially hospitalized after a mind bleed, a kind of stroke — developed pores and skin harm generally known as a strain sore, or bedsore, on his backside, the lawsuit stated. The go well with stated the sore worsened after he was despatched to a nursing dwelling, which the household can also be suing, then dwelling, and he died later that yr. In his closing weeks, Webb was unable to face, sit, or transfer a lot due to the damage, the lawsuit stated.
In court docket papers, Embody and the nursing dwelling denied negligence, as Embody has in another pending and closed lawsuits that accused it of failing to stop strain sores as a result of nurses and aides did not repeatedly reposition sufferers, or discover and deal with rising sores. Darby stated Webb’s loss of life occurred three months after his Embody keep and was not associated to his care at Embody. He stated no hospital with long-term sufferers might stop each new or worsening strain sore, however that Embody’ charges had been much like the 1% nationwide common.
Certainly one of Webb’s sons, Darel Webb, recalled a warning given to the household as they left an appointment their father had with wound specialists: A health care provider introduced up Christopher Reeve, the actor who performed Superman in motion pictures within the Seventies and Nineteen Eighties.
“He goes, ‘Remember, Superman was paralyzed from falling off the horse, but he died from a bedsore,’” he stated.
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Jordan Rau has been writing about hospital security since 2008. Irena Hwang is a New York Instances knowledge reporter who makes use of computational instruments to uncover hidden tales and illuminate the information.
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METHODOLOGY
To look at the medical rehabilitation hospital trade, we obtained and analyzed a database of inspection stories of freestanding rehabilitation hospitals from the federal Facilities for Medicare & Medicaid Providers, or CMS. We additionally obtained inspection stories from a number of states via public information requests.
We analyzed inpatient rehabilitation facility traits and affected person quantity knowledge contained in hospital knowledge recordsdata from the Rand Corp., a nonprofit analysis group. This dataset compiles value stories all hospitals submit annually to CMS. For every facility for the years 2012 to 2023, we categorized annual discharges by facility kind (freestanding rehabilitation hospital or unit inside an acute care hospital); facility possession standing (for-profit, nonprofit, or authorities); and which hospitals had been owned by Embody Well being beneath its present or prior identify, HealthSouth.
Monetary details about Embody Well being was obtained from the corporate’s Securities and Alternate Fee disclosure filings.
We examined the readmission charges for all inpatient rehabilitation services that CMS publishes in its high quality knowledge. CMS evaluates the frequency with which Medicare sufferers had been readmitted for probably preventable causes to an acute care hospital throughout their rehab keep. Individually, CMS additionally evaluates the frequency of probably preventable readmissions to an acute care hospital inside 30 days of discharge from rehab. We additionally examined the speed of profitable return to dwelling or neighborhood. Figures for all three metrics had been obtainable for about 1,100 of the roughly 1,200 rehab services within the CMS knowledge. The latest readmission knowledge coated Medicare discharges from October 2021 via September 2023.
We examined nursing dwelling penalties from the final three years from CMS’ knowledge on nursing properties.
©2025 KFF Well being Information. Distributed by Tribune Content material Company, LLC.
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