By Daniel Ducassi, FloridaBulldog.org
Gov. Ron DeSantis touted in May the opening of a COVID isolation center to protect the elderly in Jacksonville run by a company that federal authorities had accused of engaging in a “kickback” scheme involving a sham medical director and phony paperwork. Clear Choice Health Care paid $1.5 million last year to resolve the allegations without admitting any wrongdoing.
Florida’s Agency for Health Care Administration partnered with 23 companies to serve as COVID isolation centers in the state. Chief among those was Clear Choice Health Care, which manages Dolphin Pointe Health Care along with two other facilities AHCA was working with.
The state’s deal with 146-bed Dolphin Pointe alone is worth millions to Clear Choice.
State paperwork shows that AHCA agreed to pay Dolphin Pointe for Medicaid patients at the normal provider rate of $261 per day plus $325 per day, for a total of $586. Even when those beds are vacant, the state agreed to pay the $261 per bed, per day rate. And for the uninsured or underinsured denied CARES Act funding, the state also agreed to pay the $586 per day total rate.
Under those rates, Dolphin Pointe would receive a minimum of $38,000 per day for every day it remained open with empty beds. If half its beds were filled with Medicaid patients, payments would rise to more than $61,000 a day.
Likewise, ACHA’s agreement with Dolphin Pointe also contains a “Post-COVID Payment Period” in which the state agreed to pay the $261 per day rate “for vacant beds for up to 4 months after the last COVID patient is discharged.” That works out to more than $4.5 million for the period.
Clear Choice money to GOP
For years, Clear Choice money has flowed heavily into Republican coffers.
The company gave more than $100,000 to the Republican Party of Florida (RPOF) since 2010 and another $47,000 plus to the Florida Republican Senatorial Campaign Committee. Clear Choice also chipped in $5,000 to Friends of Ron DeSantis in August 2019. Clear Choice senior vice president and partner Geoffrey Fraser gave $5,000 to the RPOF last year. Federal Election Commission records show he also contributed $6,000 to Donald J. Trump for President, Inc. in 2020.
The big money man behind Clear Choice is Atlanta businessman Samuel Kellett, who has also given heavily to Republican candidates, including $100,000 in 2018 to Sen. Rick Scott’s New Republican PAC. Kellett also contributed $100,000 in 2013 to another Scott political organization called Let’s Get to Work, and personally gave $50,000 to the Republican Party of Florida in 2014. His company, SBK Capital, also gave $50,000 to RPOF in 2014. His brother and business partner Stiles Kellett Jr. – another notable Republican donor who also gave $100,000 to Scott’sNew Republican PAC in 2018 – is perhaps best known for his prominent role as a board member of WorldCom, which declared bankruptcy in 2002 amid a $7.7-billion accounting scandal. Though Stiles Kellett does own a nursing home and an assisted living facility in partnership with his brother, he does not appear to have a financial stake in any that served as COVID isolation centers.
Clear Choice’s federal troubles began in July 2016 when a former administrative employee at Conway Lakes Health and Rehabilitation, a Clear Choice facility in Orlando, blew the whistle on the alleged kickback scheme.
A 40-page lawsuit accused Clear Choice and its top executives of orchestrating a scheme in which “sham medical directors and physician advisors” were rewarded through “monthly payments and wining and dining” along with “free use of vacation properties” in exchange for patient referrals, a violation of federal law.
Conway Lakes is one of at least three Clear Choice facilities AHCA had an agreement with to serve as a COVID isolation center. The others are Jacksonville’s Dolphin Pointe and the Port Charlotte Rehabilitation Center.
The whistleblower, Jonathan Montes de Oca, said he participated in phone calls with Clear Choice president and partner Jeffrey Cleveland and senior vice president and partner Geoffrey Fraser “where regular and open references were made as to how the monthly payments to physicians drove revenue through patient referrals.” The executives would sometimes ask “what are we doing for our docs?”
The whistleblower detailed how he had been involved in falsifying documentation of quality assurance meetings necessary for state licensure reasons. Those bogus records were also used as an excuse to pay physicians who didn’t actually work for the company as so-called “medical advisors” and for participating in quality assurance meetings that never happened.
Montes de Oca also detailed payments to a physician who was a sham “medical director” who didn’t actually work for Clear Choice, but was being paid for referring patients.
The Department of Justice later took over the case, and in January 2019 the U.S. District Attorney for the Middle District of Florida announced that Clear Choice, Cleveland, Fraser and others accused of being involved in the scheme settled the kickback case for $1.5 million.
DeSantis and Dolphin Pointe
Sixteen months later, at a press conference in Jacksonville, DeSantis announced the state’s partnership with Dolphin Pointe to serve as an isolation center for COVID positive patients of long-term care facilities who had been discharged from the hospital but couldn’t yet return to their own long-term care facility. The governor praised Dolphin Pointe while thanking Fraser by name.
“This partnership with Dolphin Pointe is in line with our administration’s efforts to protect vulnerable populations from COVID-19,” DeSantis said. Then AHCA Secretary Mary Mayhew also praised Dolphin Ponte: “I can’t tell you how important this facility is for our state’s response.”
She added that Fraser and Clear Choice were the driving force behind the concept: “We did not have to really pressure Geoff and the team here. They paved the way. They had the vision.”
No mention was made of Clear Choice’s settlement the year before or the federal government’s accusations of lawbreaking.
Geoffrey Fraser told The Florida Times-Union in June that he raised the idea with Mayhew of using Dolphin Pointe as a place for contagious virus patients. “Do you think there would be a need for virus patients you didn’t need to keep sitting in the hospital but you couldn’t return to their nursing home to possibly infect others?” he said he told her.
Dolphin Pointe presented “a unique opportunity,” Fraser told the Jacksonville Daily Record, because it had no patients – the facility opened April 14.
State: Isolation centers in ‘full compliance’
Asked about doing business with Clear Choice, AHCA provided a statement without attribution noting, “The settlements did not preclude the company’s ability to operate in Florida,” and asserting it had “thoroughly reviewed the regulatory history for nursing homes serving as COVID Isolation Centers, and all of the isolation facilities were in full compliance with state and federal nursing home regulations when designated.”
However, various publications have raised questions about the “spotty track records” of some of the isolation centers, finding “histories of failure.” Tampa Bay television station WFTS found seven of the facilities have been on the state’s watch list for not meeting nursing care standards as recently as August. The Palm Beach Post found two of the facilities are part of a chain facing a $250-million fraud judgment.
The AHCA statement also said that all of the facilities “were offered payment during a ‘post-COVID’ ramp down period to provide the facility with the time and resources needed to transition back to normal operations.” Facilities that were entirely dedicated to COVID isolation would get four months of payments for empty beds, while those with only a wing dedicated to isolation would get one month of payments for empty beds.
AHCA provided Florida Bulldog copies of its agreements with Dolphin Pointe, Conway Lakes and the Port Charlotte Rehabilitation Center, but some documentation appeared to be missing. For example, one document was labeled “Amendment No. 2” to the agreement with Dolphin Pointe, but no “Amendment No. 1” was provided.
The isolation centers were supposed to serve as a key part of DeSantis’s pandemic response, to protect the elderly as those most vulnerable to the virus.
“If the governor ‘wants the virus to spread freely’ would he have created COVID only nursing homes?” asked DeSantis communications director Fred Piccolo in a Nov. 10 tweet.
COVID Isolation Centers phased out
Yet despite the intensifying pandemic, the DeSantis administration phased out the program more than a month before Piccolo’s tweet: Clear Choice’s Conway Lakes and Port Charlotte facilities were told to stop taking new COVID patients as of Sept. 18 while Dolphin Pointe was to stop taking new COVID patients starting Oct. 1.
The governor’s office did not answer Florida Bulldog’s questions about the state’s deals with Clear Choice or the company’s alleged history of illegal kickback activity, including a question about how Clear Choice’s political contributions influenced the award of state contracts.
Samuel Kellett abruptly hung up on a Florida Bulldog reporter when reached by phone.
Neither Fraser nor Jackie Bartlett, Clear Choice’s executive director of market development, answered any questions about the whistleblower lawsuit, the settlement or the company’s COVID-19 isolation centers.
At the time of the $1.5-million settlement, the company told trade publication Skilled Nursing News, “While Conway Lakes disputes the allegations made by Mr. Montes de Oca, it determined that it would be less disruptive to its business and its patients to negotiate a settlement with the government.”
It’s not the first time the DeSantis administration has signed agreements with companies whose executives have faced serious legal troubles. Back in April, a top DeSantis official signed off on an $11.3-million COVID-19 testing contract with an unqualified company run by a confessed thief, then later changed the contract to only include testing supplies after the state found out the company had lied to them about being a testing company.