The former chief executive officer of American Healthcare Management, a now-defunct nursing home chain, pleaded guilty to criminal charges of healthcare fraud and conspiracy and failure to care for residents.
In an unusual legal move, the prosecution for healthcare fraud was based in part on allegations that the gross inadequacy of care represented a conspiracy to defraud Medicare and Medicaid. Prosecutors argued that Robert Wachter, 59, the St. Louis-based company's CEO from 1998 to 2001, should be held responsible because he ordered continued cost cuts at the facilities, even as he and his partner collected millions of dollars in salaries, management fees and profit distributions from the nursing homes. Three of the company's 11 former nursing homes also pleaded guilty.
Wachter, whose sentencing is scheduled for Feb. 25, 2007, faces up to 18 months in prison and a $29,000 fine. His attorney could not be reached for comment. Prosecutors alleged that the nursing homes did not have sufficient staff and were unsanitary, with residents suffering from dehydration, malnutrition and life-threatening bed sores. An attorney for the nursing homes said they would not comment on the plea agreement.