Ineligible nursing home managers received Covid-19 bonuses

Eight of the nine senior managers who earned too much to qualify for Covid-19-related hazard pay at New Jersey’s state-run veterans nursing homes received it anyway, according to records obtained by The Wall Street Journal.

The records show that the state veterans affairs agency misappropriated federal Covid-19-relief funds more widely than it has acknowledged. Agency emails reviewed by the Journal also show that nursing-home managers procured the payments after being repeatedly told that they were ineligible.

The federal stimulus funds were meant for lower-level state employees who worked in dangerous conditions dealing directly with Covid-19 patients, but not for administrators if they were simply performing their normal functions during the pandemic or those with salaries above a certain threshold.

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A Journal series last year that examined fatal missteps at U.S. nursing homes during the pandemic included an October article showing how one of the agency’s facilities, the Menlo Park Veterans Memorial Home, became one of the deadliest places for Covid-19 in the country. Managers there, including three of the top officials who received the illicit payments, discouraged employees from wearing masks and delayed acknowledging the virus’s spread in the facility where more than 100 residents’ deaths were linked to Covid-19, the Journal’s investigation found.

After the Journal reported this March on the payments to two of the high-earning managers, the agency said it began its own investigation. The state has since recovered improper payments it made to some of the high-ranking managers and has a plan to restructure parts of the agency’s operations as soon as next month, two state officials said.

Nearly 100 people died during the height of the coronavirus outbreak at the Menlo Park Veterans Memorial Home in April, more than 10 times the number in a typical month. Among those who died were 84-year-old Isabella Kovacs and 86-year-old Joan Williams. Their stories provide a window into what went wrong at the New Jersey facility. Photo: Shari Davis/Julie Diaz

Nonetheless, the emails along with payment data obtained by the Journal in public-records requests also show the agency made additional questionable payments to lower-paid administrators that officials have defended.

All three facilities operated by the veterans agency made inappropriate payments, the records show. The agency earlier explained the payments at a single facility to two managers as an administrative error.

The agency’s review of the "payments is ongoing and any erroneous or unauthorized payments will be recouped," said Kryn Westhoven, a New Jersey Department of Military and Veterans Affairs spokesman, in a statement. Changes in the payroll functions and human-resources staffing are under review, the statement said.

The plan to restructure the agency would centralize payroll functions, as well as human resources, at the agency’s headquarters in Lawrenceville, N.J., the two state officials said. That would reduce the authority of chief executives of the individual facilities to authorize payments such as the hazard-pay bonuses.

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Menlo and another facility have been under investigation by the state attorney general at least since September, emails reviewed by the Journal show. This spring, detectives for the Bergen and Middlesex county prosecutors’ offices working on the attorney general’s probe interviewed relatives of deceased veterans-home residents and a veterans-agency employee, said Paul da Costa, a lawyer representing the witnesses in related civil litigation.

r investigation is very much ongoing," said Steve Barnes, a spokesman for the New Jersey attorney general. He said the investigation is focused on nursing homes with high numbers of Covid-19-related deaths, including veterans homes, and has yet to result in any enforcement actions.

The three top Menlo managers, including former Chief Executive Elizabeth Schiff-Heedles, who was fired as part of a broader shake-up in October days after the Journal’s investigation was published, collectively received nearly $40,000 in payments for which they were ineligible. The state has been unsuccessful in recovering roughly $13,400 it paid Schiff-Heedles and about $12,000 it paid to her deputy overseeing nursing, Kamala Kovacs, according to people familiar with the matter.

Kovacs, whose improper payment hasn’t previously been reported, has since resigned from the agency and declined to comment in a brief phone call with the Journal. Schiff-Heedles denied knowledge of the payments in a brief interview in March, and like most of the other senior managers, didn’t respond to requests for comment in recent days.

By contrast, the payroll records show, nurses who spent long days in the facility’s deadly Covid-19 isolation unit, called Stars and Stripes, received far less than these administrators from the hazard-pay program, which was funded by the federal Coronavirus Aid Relief and Economic Security Act.

Licensed practical nurse Elizabeth Brown received about $4,500 in special hazard payments, about one-third of what Kovacs and Schiff-Heedles received, the records show.

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She worked on Stars and Stripes throughout the pandemic, directly caring for sick and dying patients. In May, she contracted Covid-19 herself and was out sick for two weeks—an absence that payroll records show reduced her hazard pay, which covered only hours actually worked.

"I almost lost my life in the Covid unit, and I guess that’s what my life is worth," she said of the hazard pay.

At the agency’s Paramus facility, where about 90 residents’ deaths have been linked to Covid-19, two assistant CEOs received smaller payments for which they were ineligible, totaling about $2,500, records show. Matt Schottlander, the former CEO in Paramus who was fired during the October shake-up, was the only top manager at the agency’s nursing homes to forgo the payments, the payroll records show. He couldn’t be reached for comment.

The hazard pay—called by the state "emergency compensation rate" payments—provided a 50% pay bump for regular hours, and certain overtime hours, worked by state employees with hands-on, high-risk jobs, like caring for nursing-home patients or doing child-neglect investigations that require home visits. The program covered the period from March 28 to June 30 of last year for most eligible state workers.

Workers in administrative jobs also were allowed to get the special bonus payments if they performed extra duties that involved direct interactions with certain clients or patients of state programs, for instance during periods when the programs were short-handed.

Managers in the higher pay grades, such as the chief executives and assistant CEOs of the state veterans agency’s three nursing homes, weren’t eligible for the payments under any circumstances.

John Langston, director of the New Jersey agency’s human resources division, repeatedly told the chief executives those rules in a series of emails beginning in July, copies reviewed by the Journal show. But the homes kept submitting requests to the Civil Service Commission for approval to issue payments to ineligible managers anyway, the emails show. The commission, which was supposed to have the final say on who would get the money, denied them, the emails show.

Finally, Langston, a retired Army colonel, told Dawn Graeme, Menlo’s human-resources manager at the time, to remove the high-ranking managers from the list of employees covered by the payment request and resubmit it. She replied that she had done so, the emails show.

The bosses were paid anyway, records show.

One reason, senior state officials said, is that the nursing homes run their own payroll departments and the CEOs must approve the payments. That means the individual facility CEOs were essentially signing their own hazard-pay checks even after the Civil Service Commission denied their requests.

As the payments flowed last year, however, officials at headquarters balked at intervening to block them because they thought the CEOs might file complaints against them, emails reviewed by the Journal show.

"I allowed multiple unedited submissions with wrong information to go to CSC because I anticipated the CEOs would allege something improper or unseemly," Langston said in a later email to colleagues.

At the department’s Vineland veterans home, where 11 residents died of the virus, officials submitted requests to pay 63 workers it claimed performed extra duties that qualified for the payments involving handling or treating Covid-19 residents or coming into contact with such residents’ bodily fluids during the two-week pay period ending April 10, 2020.

The facility’s director of nursing services, Carmen Ellis-Jackson, got $1,753.56 in hazard payments for the pay period, the agency records show, on the basis that she had spent 72 hours "administering Covid tests" and "treating Covid residents."

The facility didn’t report its first suspected Covid-19 case until April 16, 2020, and reported no confirmed cases until several days later, according to internal tracking spreadsheets viewed by the Journal. Ellis-Jackson didn’t respond to a request for comment.

A group of Vineland maintenance workers filed formal complaints claiming that they were denied payments under the program for work that was at least as dangerous as the duties claimed for other workers, people with the matter said.

In a meeting to discuss their grievance, Vineland’s chief executive, Allyson Bailey, explained that because the funds could be audited by the federal government, "I couldn’t just bend the rules and say, ‘pay everybody,’" according to an audio recording of the meeting heard by the Journal.

One unidentified maintenance worker heard in the recording cited a colleague who received just $21 in such payments. The workers complained that others received thousands of dollars with dubious justifications.

Bailey told the workers she agreed the program unfairly rewarded certain higher-paid workers, saying "a couple kids got a great present, and my other kids didn’t get any, or got a little tiny baby present."

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Not mentioned during the meeting: She and her top two deputies were among the winners, getting a combined $11,249.44, for which they were ineligible, according to the payment records.

The veterans agency eventually recovered those funds, according to a statement provided by Westhoven.

The maintenance workers’ requests were denied in April.