Mentally ill patients are eligible for nursing home care paid for by Medicaid if they need 24-hour supervision or hands-on assistance. Nursing homes in Ohio are using a Medicare loophole to accept hundreds of mentally ill patients discharged from hospital psychiatric wards, spending millions of taxpayer dollars to house patients who often do not qualify for nursing home care, a state investigation found.

The three Cleveland-area nursing homes at the center of the inquiry, all run by Saber Healthcare Group, received $59 million in Medicaid funds from 2005 through August 2007, according to the state. The state’s Department of Mental Health estimates that about 1,300 psychiatric patients a year are admitted to Ohio nursing homes under a Medicaid rule that allows 30-day convalescent stays. The system provides a windfall for nursing homes, at the public’s expense, said William O’Boyle, a licensed clinical counselor who evaluated nursing home patients for the Department of Mental Health.

This situation creates two major problems. First, the nursing homes are defrauding the federal government by keeping elderly psychiatric patients in their facility long past the time permitted by Medicaid. Second, most nursing homes do not have appropriately trained staff to deal with psychiatric patients…putting both the psychiatric patient and the rest of the residents at risk!

Dan Frith
Dan Frith

Dan Frith has over 25 years of experience representing individuals and families in cases of medical malpractice throughout Virginia. He has been named "Best Medical Malpractice Attorney" by Roanoker Magazine and is a member of the Million Dollar Advocates Forum. To speak with Dan, contact him by email at