SETTLEMENT AGREEMENT
1. PARTIES

This Settlement Agreement (?Agreement?) is entered into by the Medicaid Fraud and
Residential Abuse Unit of the Of?ce of the Vermont Attorney General (?State?),
and 300 Pearl Street Operations LLC (dba Burlington Health Rehab); 1248 Hospital Drive
Operations LLC (dba St. ohnsbury Health Rehab); and 98 Hospitality Drive Operations LLC
(dba Berlin Health Rehabilitation) (collectively the ?Genesis Centers?), all subsidiaries of
Genesis Healthcare, Inc., through their authorized representatives.

II. PREAMBLE

As a preamble to this Agreement, the Parties agree to the following:

1. Genesis Healthcare, Inc., headquartered in Kennett Square, owns
and operates through subsidiaries skilled?nursing and assisted-living facilities throughout the
United States, including nine nursing homes in Vermont. The Genesis Centers are among those
nine nursing homes.

2. 300 Pearl Street Operations, LLC is a domestic, member-managed, limited
liability company. It holds the Vermont license to operate the BurlingtOn Health Rehab
nursing home, located at 300 Pearl Street, Burlington, VT 05401. It is the owner of the trade
name ?Burlington Health Rehab.?

3. 1248 Hospital Drive Operations LLC is a domestic, member-managed, limited
liability company. It holds the Vermont license to operate the St. Johnsbury Health and
Rehabilitation nursing home, located at 1248 Hospital Drive, St. ohnsbury, VT 05819. It is the

owner of the trade name ?St. ohnsbury Health Rehab.?

4. 98 Hospitality Drive Operations LLC is a domestic, member-managed, limited
liability company. It holds the Vermont license to operate the Berlin Health and Rehabilitation
nursing home, located at 98 HOSpitality Drive, Barre, VT 05641. It is the owner of the trade
name ?Berlin Health Rehabilitation Center.?

5. The Genesis Centers are currently and were at the time enrolled as Vermont
Medicaid providers from January 2018 through June 2019 (?relevant time period?), providing
residential and skilled nursing care to their residents. As Medicaid providers, pursuant to their
Vermont Medicaid Provider Enrollment Agreements, the Genesis Centers agreed to comply with
applicable state and federal rules and regulations, including the Vermont False Claims Act, 32
V.S.A. 631, et. seq, governing the submission of claims to the Medicaid program
(?Government Healthcare Program Requirements?).

6. The State of Vermont licensed the Genesis Centers to operate skilled?nursing
facilities during the relevant time period. As licensed providers, the Genesis Centers were
required to comply with all laws and regulations related to their licenses, including the Vermont
Agency of Human Services Licensing and Operating Rules for Nursing Homes.

7. Vermont law, 13 V.S.A. 1375, et. seq, affords special protections to
?vulnerable adults? and imposes heightened responsibilities on their ?caregivers? (?Vermont
Vulnerable Adult Statutes?). During the relevant time period, the Genesis Centers? residents
were vulnerable adults, and the Genesis Centers were caregivers, under the law. Pursuant to 13
V.S.A. 1378, it is unlawful for a caregiver to intentionally or recklessly neglect a vulnerable
adult.

8. Beginning in 2018, and continuing into 2019, MFRAU investigated the Genesis

Centers after receiving referrals of potential neglect of residents, including an untimely death.

MFRAU completed its investigations in 2019. During the course of those investigations, the
State obtained evidence that it contends gives rise to certain civil claims against the Genesis
Centers for engaging in the conduct described in subparagraphs A through below (?Covered
Conduct?), during all or part of the relevant time period. Speci?cally, the State alleges:

A. 300 Pearl Street Operations, LLC employed a visiting nurse as a contract staff
member. Although unfamiliar with the facility?s residents, their dietary needs and the
meal delivery process, the staff member was asked to deliver food trays to bed-bound
residents, including residents on highly specialized diets. The staff member delivered
the wrong tray to Resident 1, who was on a specialized diet and required constant
supervision while eating. After delivering the wrong tray, the staff member left
Resident 1 alone and unsupervised. Resident ingested the improper food, which
became lodged in Resident 1?s throat causing a respiratory emergency and ultimately
resulting in death. I

B. 300 Pearl Street Operations, LLC failed to arrange or provide mental health
counseling, social services or addiction counseling services to Resident 2 to address
concerns detailed in the resident?s care plan. Additionally, the facility discharged
Resident 2, who was unable to care for his basic needs, in an unsafe manner and
under circumstances where a negative health outcome was reasonably foreseeable.
As a result, within one day following discharge, Resident 2 required emergency
hospitalization and prolonged treatment for a serious sepsis infection.

C. 1248 Hospital Drive Operations LLC utilized the services of a contract staff member
to perform the duties of a dietary aide. Although unfamiliar with the facility?s

residents and their dietary needs, the staff member was asked to prepare food trays for

residents, including residents on highly specialized diets. The staff member plated
the wrong tray for delivery to Resident 3 who was on a specialized diet, requiring
ground meat. As a result, Resident 3 ingested unground meat and experienced a
choking incident requiring hospitalization.

D. 98 Hospitality Drive Operations LLC staff members identi?ed tWo ulcers on the

lower leg of Resident 4 but did not perform required wound assessments thereafter.
As a result, the ulcers deteriorated, and Resident 4 required emergency hospitalization
for treatment.

B. The Genesis Centers submitted claims to Medicaid for the services provided to the

Residents 2 and 4, including services on the dates of their injuries. Also, the Genesis
Center?s conduct caused area hospitals and hospice providers to submit claims to
Medicaid for care provided to Residents 1?4.

9. The State contends that the Covered Conduct constitutes violations of the Genesis
Centers? Provider Enrollment Agreements, Government Health Care Program Requirements,
including the Vermont False Claims Act 32 V.S.A. ?630, etisequ and the Vermont Vulnerable
Adult Statutes, for which it could seek, or is seeking, remedy through administrative or civil
action.

10. The Genesis Centers do not dispute the facts regarding the Covered Conduct 
insofar as they are described above in paragraph 8 (subpara?graphs A through E). However, the
Genesis Centers believe that there are additional facts that would show a lack of the requisite
intent or would demonstrate that any improper billing, if any were submitted, was the result of
mistake or error. Therefore, the Genesis Centers deny liability in general, and speci?cally deny

that they violated their Provider Enrollment Agreements, Government Health Care Program

Requirements, the Vermont False Claims Act, the Vermont Vulnerable Adult Statutes or any
other state or federal law.

11. To avoid the delay, expense, inconvenience, and uncertainty of litigation, and in
consideration of the mutual promises and obligations of this Agreement, the Parties reach a full
and ?nal settlement related to the Covered Conduct, pursuant to the Terms and Conditions set
forth below.

TERMS AND CONDITIONS

NOW, THEREFORE, in consideration of the mutual promises, covenants, and
obligations set forth below, and for good and valuable consideration as stated herein, the Parties
agree as follows:

1. The Centers shall engage at their own expense Af?liated Monitors, Inc., to serve
as Quality of Care Reviewer Reviewer?), for a maximum term of three years. This is a
material obligation of this Agreement. The term, duties and responsibilities of the QC Reviewer
are described in Attachment A which is incorporated here by reference.

2. The Centers shall engage at their own expense a Patient Care Coordinator,
approved by the State, to serve for a maximum term of three years. This is a material obligation
of this Agreement. The term, duties and responsibilities of the Patient Care Coordinator are
described in Attachment which is incorporated here by reference.

3. The Genesis Centers shall pay to the State $740,143 (?Settlement Amount?).
The Settlement Amount includes damages under the Vermont Vulnerable Adult Statutes, and
damages and penalties under the Vermont False Claims Act. Genesis Centers shall pay the

Settlement Amount as follows:

a. On or before March 1, 2020, the Genesis Centers shall pay $370,071.50 by
- electronic funds transfer pursuant to written instructions provided by the
Vermont Attorney General?s Of?ce.
b. On or before June 30, 2020, the Genesis Centers shall pay $370,071.50 by
electronic funds transfer pursuant to written instructions provided by the
Vermont Attorney General?s Of?ce.

4. Subject to the exceptions in Paragraph 6 below, in consideration of the obligations
of the Genesis Centers set forth in this Agreement, and conditioned upon the Genesis Centers?
payment in full of the Settlement Amount, and compliance with any other material obligations,
including the engagement of, and good-faith cooperation with, the QC Reviewer and the Patient
Care Coordinator (described in Paragraphs 1 and 2 above), the State (on behalf of itself, its
of?cers, agents, agencies, and departments) releases the Genesis Centers from any civil or
administrative claim the State has or may have for the Covered Conduct. This release
speci?cally excludes any and all parent entities of the Genesis Centers.

5. In consideration of the obligations of the State set forth in this Agreement, the
Genesis Centers, their current and former parents, divisions, subsidiaries, successors, transferees,
heirs, assigns, direct or indirect af?liates, current and former owners, shareholders, principals,
members, directors, of?cers, employees, representatives, servants, agents and consultants,
release the State, its agencies, political subdivisions, employees, servants, and agents, from any
claims that the Genesis Centers have asserted, could have asserted, or may assert in the ?lture

against the State, related to the Covered Conduct and the State?s investigation thereof.

6. Notwithstanding any terms of this Agreement, speci?cally reserved and excluded

from the scope and terms of this Agreement as to any entity or person are any and all of the

following:

a. Any liability arising under Vermont state tax codes, Vermont tax laws or
Vermont tax regulations;

b. Any criminal, civil or administrative liability to the State for conduct other
than the Covered Conduct;

c. Any liability based upon obligations created by this Agreement;

(1. Any liability for express or implied warranty claims or other claims for
defective or de?cient products or services, including quality of goods and
services;

c. Any liability for personal injury or property damage or for other consequential
damages arising from the Covered Conduct.

7. The Genesis Centers shall be deemed in default of this Agreement if the State, in

its sole discretion, determines that a Default Event, described in subparagraph a and below, has
occurred, after following the procedure described in Paragraph 9 below:
a. The Genesis Centers fail to pay either installment payment of the Settlement
Amount provided for in Section Paragraph 3(a?b) of this Agreement; or
b. The Genesis Centers fail to satisfy any other material obligations undertaken
in this Agreement.
8. In the event the State determines that a Default Event has occurred, the State shall
provide written notice (?Notice of Default?) and allow the Genesis Centers an opportunity to

cure the Default Event within ten (10) business days of receipt of the written notice. Notice of

Default will be sent by certi?ed ?rst class mail to: Kelly C. Tripp, Associate General Counsel
Health Care and Regulatory, Genesis Administrative Services, LLC., 101 East State Street,
Kennett Square, 19348.

9. If the Genesis Centers do not cure the Default Event to the State?s reasonable
satisfaction within ten (10) business days of receipt of the Notice of Default, or if the cure
requires more than ten (10) days, immediately initiate steps that the State reasonably deems to be
suf?cient to cure the default and thereafter diligently continues and completes all reasonable and
necessary steps suf?cient to produce compliance as soon as reasonably practical, the Vermont
Attorney General?s Of?ce may declare the Genesis Centers in default of this Agreement
(?Declaration of Default?).

10. Upon a Declaration of Default, the State may exercise, at its sole option, one or
more of the following rights, as applicable:

A. Declare this Agreement breached, and proceed against the Genesis Centers for
any claims, including those to be released by this Agreement, in which case
the Genesis Centers may contest whether a Default has occurred in court;

B. Exercise any other right granted by law, or under the terms of this Agreement,
or recognizable at common law or in equity.

11. The Parties represent that this Agreement is freely and voluntarily entered into
with the advice of counsel without any degree of duress or compulsion whatsoever.

12. Each party to this Agreement shall bear his, her or its own legal and other costs
incurred in connection with this matter, including the preparation and performance of this

Agreement.

13. The laws of the State of Vermont govern this Agreement. The Parties agree that
the exclusive jurisdiction and venue for any dispute arising between and among the Parties under
this Agreement shall be the Vermont Superior Court, Washington County, unless otherwise
agreed in writing by the State and the Genesis Centers.

14. This Agreement is intended to be for the bene?t of the Parties only, and by this
instrument the Parties do not release any liability against any other person or entity.

15. Nothing in this Agreement constitutes an agreement by the State concerning the
characterization of the Settlement Amount for the purposes of the state or federal tax laws. The
Genesis Centers will rely on its own counsel or experts regarding the effect of this Agreement
under any state or federal tax laws.

16. The Genesis Centers represent and warrant that the representative(s) designated
below are authorized to execute this Agreement on their behalf, and that the Genesis Centers
have not assigned any claims, rights or liabilities subject to this Agreement to any other person.
The undersigned State signatories represent that they are signing this Agreement in their of?cial
capacities and that they are authorized to execute this Agreement on behalf of the State through
their respective agencies and departments.

17. Facsimiles of or signatures shall constitute acceptable binding signatures for

purposes of this Agreement.

18. This Agreement shall be binding on all successors, transferees, heirs, and assigns
of the Parties.
19. This Agreement constitutes the complete agreement among the State and the

Genesis Centers with respect to this matter and shall not be amended except by written consent

of the Parties.

20, This Agreement may be executed in counterparts, each of which shall constitute
an original, and all of which shall constitute one and the same Agreement.
21. This Agreement is effective on the date of the signature of the last signatory to the
Agreement (?E??ectixge Date?)
SIGNATORIES
STATE OF VERMONT

THOMAS J. DONOVAN, JR.
VERMONT ATTORNEY GENERAL

DATED: Feb 59030 By; mquJQQ/?

Elizabeth L. Ahderson 
Assistant Attorney General
Director, MFRAU

390 PEARL STREET OPERATIONS LLC

BY: 
Michael S. Sherman, Esq.
Secretary

DATED 

 

98 HOSPITALITY DRIVE OPERATIONS LLC

 

 

DATED: February 144, 2020 BY: 
Michael S. Sherman, Esq.
Secretary

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1248 HOSPITAL DRIVE OPERATIONS LLC

BY: 

Michael S. Sherman, Esq,
Secretary

DATED: 

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