Michigan AG Secures $4.5M Settlement in Nursing Home Neglect Case

News Summary

Michigan Attorney General Dana Nessel has reached a $4.5 million settlement concerning nursing home neglect allegations involving six facilities. The settlement follows a whistleblower lawsuit that revealed severe patient mistreatment, including failure to treat serious health issues and inadequate staffing. Despite denying the accusations, Villa Financial Services and Villa Olympia Investment will pay $3.4 million to the U.S. and $1.08 million to Michigan. They must also abide by a five-year Corporate Integrity Agreement to ensure compliance with care standards.

Detroit, Michigan — Michigan Attorney General Dana Nessel has secured a $4.5 million settlement concerning allegations of nursing home neglect involving six facilities in the Detroit area. This settlement impacts three facilities operated by Villa Financial Services LLC and three by Villa Olympia Investment LLC. The involved nursing homes are The Ambassador in Detroit, Father Murray in Center Line, Imperial in Dearborn Heights, Regency in Taylor, St. Joseph’s in Hamtramck, and Westland in Westland.

The allegations arose from a federal whistleblower lawsuit filed by employees of Villa, who reported severe mistreatment of residents in the state’s nursing homes. These allegations included a range of concerning practices, such as the failure to prevent and treat serious health issues like infections and pressure ulcers, insufficient measures to prevent falls, and inadequate provision of toileting needs. In some cases, residents were reported to have been left sitting or lying in soiled beds and clothes for extended periods, a situation linked to insufficient staffing levels at the facilities.

While Villa Financial Services and Villa Olympia Investment have denied these allegations, the settlement requires them to pay approximately $3.4 million to the United States and $1.08 million to the State of Michigan. This monetary resolution follows an investigation conducted by the United States Attorney’s Office for the Eastern District of Michigan in conjunction with the Health Care Fraud Division of the Michigan Department of Attorney General.

As part of the comprehensive settlement agreement, Villa will also enter into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services’ Office of the Inspector General. This CIA mandates the oversight of an independent quality monitor to assess the companies’ adherence to care delivery standards and their effectiveness in recognizing, addressing, and rectifying patient care issues.

The Michigan Attorney General’s Health Care Fraud Division, which is recognized as the federally certified Medicaid Fraud Control Unit for the state, plays a crucial role in investigating such cases. The division receives 75% of its funding from a federal grant award of approximately $5.7 million for fiscal year 2025, with the remaining 25% sourced from the State of Michigan, amounting to roughly $1.9 million.

This lawsuit forms part of broader national efforts to crack down on health care fraud as outlined in the U.S. Department of Justice’s 2025 National Health Care Fraud Enforcement Action. Attorney General Nessel highlighted the critical nature of ensuring quality care in nursing homes and the necessity of holding accountable those who fail to provide such care.

These recent developments underscore the ongoing scrutiny and regulatory efforts aimed at improving care standards in long-term healthcare facilities, aiming to safeguard the well-being and dignity of residents who rely on these institutions for their health and safety.

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