Genesis Nursing Home CEO Takes $5M Bonus in the Wake of Widespread Death

Genesis Healthcare CEO George Hager Jr. has requested, and taken, a $5.2 million “retention payment” bonus following a particularly deadly 2020 for the nursing home chain. Hager presides over Genesis nursing homes, a corporation allegedly on the brink of bankruptcy that has suffered 1,500 COVID-19 deaths. Since drawing more than $5 million from the company, which had PPE shortages and under-staffing allegations, the Genesis CEO has faced public scrutiny.

A Timeline of Genesis Healthcare’s Financial Decisions, Culminating in a Massive CEO Bonus

• 2017 – Genesis settles case with the federal government, paying the government $53 million for billing Medicare for “medically unnecessary therapy” and providing “grossly substandard nursing care.”
• 2020 – Over Genesis’ 300+ facilities, the chain experienced almost 15,000 confirmed COVID cases and nearly 3,000 confirmed COVID deaths. These numbers are much higher than other large nursing home chains.
• March through November 2020 – Genesis nursing homes report personal protective equipment (PPE) shortages, as well as staff shortages.
• June 16, 2020 – George Hager personally receives a letter from the U.S. Congress Investigatory Panel, asking for documents related to Genesis’ incredibly high death toll, further inquiring why for-profit nursing home chains are systematically understaffed, did not supply appropriate PPE to staff, pay unlivable wages to staff and lack transparency on federal funding.
• August 2020 – Genesis Healthcare reports “crumbling” revenues.
• August 2020 – The American Health Care Association, a nursing home lobby group, demands federal money to meet the cost of COVID on nursing homes, claiming “nursing homes are facing the worst financial crisis in the history of the industry due to increased costs related to Covid.”
• During the first 3 quarters of 2020, Genesis Healthcare received the following government money and tax cuts:
  • $254 million from the federal government
  • $85 million from state governments where Genesis has nursing homes
  • $90 million in taxes deferred or forgiven
  • $157 million in Medicare prepayments
• September 2020 – Genesis gives George Hager Jr. a $935,000 annual bonus, in addition to his $900,000 annual salary.
• October 2020 – In addition to the above bonus, Hager receives a whopping $5.2 million “retention payment” to be Genesis’ CEO.
• January 5, 2021 – George Hager Jr. retires as CEO of the Genesis nursing home chain, with an additional $950,000 departure bonus.
• Above and beyond Hager’s bonuses, Genesis board of directors has approved $2.1 million to be set aside in a trust beyond the reach of creditors. This $2.1 million has been earmarked exclusively for bonuses for seven of the company’s high-ranking officers, which cannot be touched in the event that the company goes bankrupt, owes creditors or cannot provide resident care.

Scrutiny Regarding Hager’s $5 Million Payout

Genesis facilities have particularly been in focus due to infection outbreaks and prior legal issues.

The 2020 death toll in America’s nursing homes has been characterized by Congress as a ‘national disgrace’. In investigating why so many of America’s seniors died in facilities, a special COVID House investigatory panel drafted correspondence to George Hager Jr. at Genesis. The panel wrote Hager in June:

“Genesis HealthCare is one of the largest for-profit nursing home chains in the United States and has experienced severe coronavirus outbreaks at its facilities. 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.”

. . .

“Over the past decade, many for-profit and chain-affiliated long-term care companies have taken steps to maximize profits for their corporate owners at the expense of protecting their residents and workers. Research regarding the impact of private equity buyouts on quality of care at nursing homes has found that “buyouts lead to significantly lower quality of care, as measured by Five Star ratings generated by CMS” and by the rate of readmission to a hospital within 30 days of entering the nursing home.23 The measures typically taken by private equity firms and other private owners to increase profitability—including reducing staffing levels, increasing patient volume, and failing to pay living wages or benefits to staff—also appear to have had the effect of worsening coronavirus outbreaks in nursing homes. Chronic understaffing is a pervasive problem in the long-term care industry. One study found that approximately 75 percent of nursing homes do not have adequate staffing levels.”

Does Genesis Care More About Profits or its Residents?

For a company crying poor, a $5 million parachute for a questionably effective CEO seems excessive. As Brian Lee, the executive director of Families for Better Care said, ““Yet [Genesis] can take care of those they love best — those at the top.”

Considering a Case Against a Genesis Healthcare Facility?

At Senior Justice Law Firm, our attorneys focus primarily on nursing home negligence cases. Our law firm has extensive experience handling nursing home abuse lawsuits against Genesis. Call or live chat with our office now to see if you have a potential nursing home liability claim.