The last thing Shlomo Rechnitz should have done was buy himself a luxury jet.
When he purchased the Gulfstream G-IV, in 2013, Rechnitz, the largest nursing home operator in California, had already racked up so many citations for substandard care that state Attorney General Kamala Harris soon labeled him “a serial violator of rules within the skilled nursing industry” and tried to block him from buying 19 additional homes.
Yet, instead of dedicating his resources to improve patient care, Rechnitz spent approximately $3.6 million on the private jet that over the next three years logged enough miles to crisscross the globe more than 20 times, according to flight records obtained by the National Union of Healthcare Workers. Those flights are estimated to have cost an additional $4.6 million.
Rechnitz’s spending habits should concern all Californians because over the past decade he amassed a nursing home empire under the corporate banner Brius Healthcare that controls one out of every 14 nursing home beds in the state. And it’s an empire whose patient care failures have put it in the crosshairs of state and federal authorities.
During a recent three-year period, Rechnitz’s jet touched down in Cuba, Colombia, Brazil, New York and Israel among other locations, while his nursing home company amassed nearly 400 violations of state and federal nursing care rules.
Those violations -- 37 of which posed “imminent danger of death or serious harm to patients” -- were enough last year to convince the California Department of Public Health to block the company’s bid to operate five additional nursing homes. The federal Centers for Medicare and Medicaid Services also barred three Brius homes from treating Medicare patients.
And it appears that Rechnitz’s homes may be helping pay for his travel. His jet is operated by SR Capital, LLC, one of Rechnitz’s approximately 150 subsidiary corporations. SR Capital loans money to the nursing homes, and in 2015, it collected more than $1.3 million in interest payments, according to records filed with state regulators. SR Capital likely received even more money from the nursing homes because some of them apparently failed to properly disclose their transactions.
What makes this even more troubling is that taxpayers supply 80 percent of Brius’ revenues through the Medicare and Medicaid programs. And nursing homes are traditionally a low-margin business, whose operators aren’t flying around in luxury jets.
We started tracking Rechnitz’s jet last year when he threatened to evict 190 frail and elderly nursing home residents from three of his facilities in Humboldt County, claiming he was losing about $5 million a year. It turns out that Rechnitz was crying poverty while comfortably cruising in his luxury jet at an altitude of 40,000 feet.
The bottom line: Rechnitz is shortchanging patients, caregivers, and the public while spending millions on a globe-circling jet.
It’s time for state authorities to audit Brius and its subsidiaries to determine whether Rechnitz is siphoning off public funds intended for nursing home residents.
Sal Rosselli is president of the National Union of Healthcare Workers, which represents 13,000 caregivers throughout the state, including 200 Brius nursing home workers in Marin County. Click here read the jet report “Misplaced Priorities at 40,000 Feet” and supporting data.