Massachusetts nursing home chain settles for $4 million over deliberate improper staffing allegations

BOSTON – Attorney General Andrea Joy Campbell today announced a $4 million settlement with Next Step Healthcare, LLC, a Woburn-based long-term care management company that operates sixteen nursing homes in Massachusetts. The settlement, which is the largest nursing home settlement ever reached by the AG’s Office, resolves allegations that Next Step deliberately failed to properly staff the nursing homes it owned and operated, resulting in resident harm and neglect. As part of the settlement, most of Next Steps’ facilities will be required to be overseen, at Next Steps’ own expense, by an independent compliance monitor.   

The settlement follows a years-long investigation by the AG’s Office, which investigated reports of substandard care or regulatory violations at Next Step’s nursing homes based on complaints and referrals received from the Department of Public Health.  

“For years, Next Step prioritized profit over care by failing to adequately staff its nursing homes,” said AG Campbell. “I am proud of my team’s efforts in securing this settlement, the largest of its kind, which will send a message that this conduct will not be tolerated and ensure that Next Step’s facilities comply with staffing requirements moving forward, assuring that vulnerable elderly residents receive the proper care they need.”    

“We have an obligation to create a safe and caring environment for some of our most vulnerable residents in Massachusetts,” said Secretary of Health and Human Services Kate Walsh. “I am grateful to the Attorney General’s Office for their work to ensure protections and appropriate measures are taken when patients can’t speak up for themselves.” 

Next Step, co-founded and co-owned by Damien Dell’Anno and William Stephan, owns, operates, and manages 16 nursing homes throughout Massachusetts, including in Attleboro, Fall River, Fitchburg, Lee, Malden, Melrose, Middleborough, Norwood, Plymouth, Taunton, Walpole, West Newton, Westborough, and Worcester. (Fall River Healthcare, Garden Place Healthcare, Wedgemere Healthcare)

Under the terms of the settlement agreement, Next Step agrees to budget staffing at state-mandated levels and pay an additional $4 million to resolve the allegations. $750,000 of those settlement funds will be paid to the Commonwealth, which will evenly distribute the amount to MassHealth and the Long-Term Care Facility Quality Improvement Fund, a DPH-operated fund that aims to improve the quality of care delivered to residents of long-term care facilities. The remaining $3.25 million will be overseen by the independent compliance monitor and must be used for additional staffing improvements, recruitment, retention, additional benefit costs, bonuses, overtime, wage increases, and/or other staffing-related initiatives over the next three years.  

In addition to the monetary penalties, Next Step has also agreed to hire, at its own expense, an independent compliance monitor, who will oversee the improvement of Next Step’s staffing levels and ensure that Next Step’s facilities comply with state staffing requirements. The compliance monitor will also be responsible for reviewing the quality of care delivered to residents at eight Next Step facilities. As part of the settlement, the compliance monitor will conduct on-site reviews of Next Step’s facilities and will submit compliance reports to the AG’s Office every six months. 

The settlement resolves the AG’s Office’s allegations that Next Step implemented staffing reductions in April 2019, despite its facilities already struggling to ensure adequate staffing levels to meet the needs of residents. Those staffing reductions included reductions of both certified nursing assistant positions and non-CNA positions. The AG’s Office alleges that Next Step implemented such reductions without consideration of patient needs.   

The AG’s Office further alleges that Next Step continued to understaff its facilities even after state regulations went into effect in April 2021 requiring certain staffing requirements. As a result, many of Next Step’s nursing facilities had staffing levels that ranked in the bottom 10% of their counties.   

The AG’s Office alleges that the low staffing levels at Next Step’s facilities led to resident neglect and harm.  

The AG’s Office contends that Next Step’s submission of claims to MassHealth for these substandard services were false claims, in violation of the Massachusetts False Claims Act, and that this conduct also violated the Massachusetts Consumer Protection Act, and a state statute protecting elders from abuse and neglect in nursing homes. 

This matter was handled by Deputy Division Chief Kevin Lownds, Assistant Attorneys General Scott Grannemann and Natalie Rutkowski, and Senior Healthcare Fraud Investigator Erica Schlain, all of the AG’s Medicaid Fraud Division, and Victim Witness Advocates Lia Panetta and Megan Murphy, both of the AG’s Victim and Witness Services Division. The Massachusetts Department of Public Health and the Massachusetts Long-Term Care Ombudsman Program provided substantial assistance with the investigation. 

Members of the public who are aware of similar practices at Next Step’s facilities and/or by other nursing homes or health care providers should call the Attorney General’s Medicaid Fraud Division at (617) 963-2360 or file a complaint through DPH’s website.