CEO Of Health & Hospital Corp. Of Marion County Resigns Amid Mounting Pressure

INDIANAPOLIS (AP) — The longtime leader of a public health agency that owns dozens of nursing homes in Indiana announced his resignation Monday amid mounting pressure from the agency’s board following a newspaper investigation.

Matthew Gutwein said he will resign, effective Sept. 30, as the president and CEO of the Health & Hospital Corp. of Marion County, which owns 78 Indiana nursing homes.

The scrutiny of Gutwein, 57, began in March after The Indianapolis Star reported that the public agency he has overseen since 2002 had diverted more than $1 billion in Medicaid funds from its nursing homes during his tenure. That money was used on other projects, including the $754 million Sidney & Lois Eskenazi Hospital in Indianapolis that opened in 2013.

State and federal officials allowed the practice, even while nursing home residents suffered in poorly staffed facilities, leading to wrongful death lawsuits and raising questions about the homes' coronavirus preparedness.

“After more than 18 deeply rewarding years, it is time for a new leader to build upon our achievements and continue this critically important work for the residents of Marion County,” Gutwein said Monday in a news release.

In a separate statement, the agency’s board members thanked him for his service and proposed a national search for a successor.

The Health & Hospital Corp. also controls the Marion County Public Health Department, Eskenazi Health and Indianapolis EMS.

Gutwein, a longtime Democrat and political fundraiser, had faced growing questions from the agency’s appointed seven-person board of trustees, The Indianapolis Star reported.

Board members voted in May to commission an independent review of its nursing homes, but have provided little public information about the review or its focus.

Since The Star published its first investigation on the health agency and its nursing homes, at least 417 residents at its long-term care facilities have died from COVID-19.

The public agency houses about 11 percent of Indiana’s long-term care residents, but accounts for about 23 percent of the COVID-19 deaths in such Indiana facilities, The Star reported.

This month, The Star published a story about a secret report that details previously unknown accusations of fraud at the agency's nursing homes. That 2016 report was compiled by American Senior Communities, the company that operates the homes on behalf of the public agency.

The report claimed that 25 people in nearly two dozen schemes defrauded the Health & Hospital Corp.’s nursing home system of at least $35 million. However, only five of those people were prosecuted and $15.5 million has been recovered on behalf of taxpayers.

Gutwein declined to file a lawsuit to recover additional losses and instead entered an agreement with American Senior Communities that effectively shrouded the full extent of the alleged fraud, The Star reported.

He has refused interviews with the newspaper, but the public agency has defended its nursing homes' record, noting that its acquisition of the homes has provided them with resources they wouldn’t have otherwise. It has also touted the benefits of Eskenazi Hospital and other operations partially funded with nursing home dollars.