We all trust our employers when they say they’re taking money out of our paycheck for insurance premiums.
Dozens of South Dakota employees had money taken out by Skyline Health Care, but their premiums were never paid. Now some of those former employees are taking legal action.
The company, which had taken over 19 South Dakota nursing homes in 2017, put 900 seniors at risk after it couldn’t pay its bills or its employees.
In November, KELOLAND Investigates looked into major medical bills that former Skyline employees thought were covered by insurance.
November 21, 2019
Charles Johnson/Former Skyline Employee: It was discovered that Skyline hadn’t paid the self-funded insurance plan for about six months.
Kennecke: Deductions were taken out of the employees paychecks and weren’t applied to the premium. Is that fraud?
Johnson: I think so. I think it could be considered fraud. Or could it be considered theft?
“I felt we were victims. It should be a crime,” Theresa Dante said.
Theresa Dante, a former cook at the Redfield Care and Rehab Center is one of Skyline’s former employees. She’s also a member of the new class action lawsuit filed in federal court in New Jersey, where Skyline Healthcare was once located above this pizza shop.
Federal lawsuit filed in U.S. District Court of New Jersey
The federal lawsuit alleges that when Skyline bought nursing homes in Arkansas, Kansas, Nebraska, and South Dakota, it told the employees that they would be enrolled in health, dental, and Aflac insurance plans, with premiums directly deducted from their paychecks. But the complaint says while the money was taken out of their checks, no insurance was ever bought.
The lawsuit claims that Skyline violated the Racketeer Influenced and Corrupt Organizations Act, or RICO, which is a federal law typically used in organized crime cases.
The former employees accuse Skyline of mail fraud and wire fraud, which includes submitting fake tax forms to the IRS to show that Skyline was complying with the Affordable Care Act, as well as fraudulently taking funds from employees’ paychecks.
The lawsuit alleges that Skyline set up a phony company, Cornerstone Quality Care, out of its New Jersey office, to enroll South Dakota employees in various insurance plans, deduct the premiums and then pocket the money.
Also submitted into evidence with the case was part of a court deposition of Skyline owner Joseph Schwartz in 2017. Schwartz said, ” because a guy sends a bill in, it doesn’t mean he needs to get paid.”
At its peak, Skyline had more than 100 facilities across the country. Now several states have passed new laws that require closer vetting of potential nursing home buyers. South Dakota is not among them.
KELOLAND Investigates searched the data base of Data. Medicare.gov for Schwartz family ownership or involvement in nursing homes in the U.S. as of Feb. 4. The map below was developed from the list of Schwartz family ownership or involvement as listed in the website’s database.
The Feb. 4 map is a change from a map developed by KELOLAND Investigates in November of 2019.
KELOLAND Investigates in November 2019 searched the database of Data.Medicare.gov and found that the site still listed the Schwartzes as owning, or involved in, several nursing homes in the U.S. The data was listed as current as of Nov. 20, 2019. Here is the map below.