Context:

Rehabilitation hospitals, particularly those owned by for-profit corporations like Encompass Health Corporation, have been implicated in serious patient safety incidents, such as fatal carbon monoxide poisoning and medication errors, without facing penalties from federal health officials. These for-profit facilities have surpassed nonprofit hospitals in patient admissions but often have worse rates of preventable readmissions, a key safety metric tracked by Medicare. Despite their profitability, Encompass hospitals have faced numerous violations, yet regulatory bodies like Medicare lack the authority to impose fines comparable to those levied on nursing homes. The company's history includes significant legal and ethical challenges, such as a major accounting scandal and a $48 million settlement for Medicare fraud allegations. Public access to inspection reports is limited, preventing consumers from making informed choices about rehab care quality and safety, while efforts to develop a five-star rating system for these facilities remain stalled.

Dive Deeper:

• Rehabilitation hospitals such as those managed by Encompass Health Corporation have reported incidents of serious patient harm, including deaths due to carbon monoxide poisoning and medication errors, but these incidents do not result in penalties from federal health officials as they do for nursing homes.

• Encompass Health, a leading for-profit rehabilitation hospital chain, has increased its dominance in the industry by acquiring nonprofit hospital rehab units and converting them into for-profit entities, which has led to higher patient admissions and profitability.

• Despite their financial success, Encompass hospitals have been criticized for high rates of preventable readmissions to general hospitals, indicating potential deficiencies in patient care quality and safety.

• Regulatory bodies like Medicare lack the authority to impose fines on rehab hospitals for safety violations, unlike the penalties imposed on nursing homes, leaving serious incidents unpunished as long as hospitals implement corrective measures.

• Encompass's history is marred by legal issues, including a major accounting scandal in 2003 and a $48 million settlement in 2019 for alleged Medicare fraud, although the company has denied wrongdoing and attributes the incidents to independent physicians.

• Public access to inspection reports of rehab hospitals is limited, hindering consumers' ability to make informed decisions about facility quality, while efforts to create a five-star rating system for these facilities have been delayed.

• The limited regulatory framework and lack of penalties for serious violations raise concerns about patient safety and the effectiveness of oversight in the rapidly growing for-profit rehabilitation hospital sector.