Local home health care providers duking it out
Behind the scenes of a young Carbondale family’s struggle to pay for nursing for their little girl is the equivalent of a full-fledged fistfight between the only two companies in the state that offer the kind of services locally that the family needs.
The nearly two-and-a-half-year battle between the companies, Aspen Home Health based in Glenwood Springs and Home Health Care of the Rockies in Grand Junction, includes accusations of lying, defamation, theft, fraud and breach of contract. And, according to lawsuits filed in 9th Judicial District Court, both firms have seen fit to embroil their customers in the fight with letters and phone calls intent on stealing business from each other.
The most recent customer to be embroiled in the fight is 14-month-old Saige Blotske, born Nov. 1, 1998 with a rare genetic birth defect that requires constant medical supervision, either in the form of shift nursing or hospitalization, through early childhood.
“Shift” nursing involves eight- to 12-hour visits by nurses, whose job is to help families care for their chronically – sometimes critically – ill at home. Saige breathes through a tracheal tube, and she requires special breathing treatments every three hours. Nurses are on duty at the Blotske home seven nights and three days a week.
Saige’s health and insurance struggles were made public in a series of news stories published last month after Home Health Care, claiming nonpayment, cut her nursing service beginning Christmas Day.
Three of the Blotskes’ nurses have yet to be paid for hundreds of hours of work, in spite of the fact that Home Health Care owner Edward McWhorter was recently sent $26,000 from the family’s two insurers.
“We have the statements. The insurance companies have paid him over $26,000, but the nurses still haven’t been paid,” said April Blotske, Saige’s mother.
April and her husband Trevor are negotiating with their private insurers to expand Saige’s home health benefits and are looking for a replacement for Home Health Care.
Aspen Home Health is one possible replacement. Since fall of 1998, the owners of Aspen Home Health, Patrick and Alexandra Piot, have been at one end or the other of a lawsuit with McWhorter.
“My husband was originally hired as a nurse at Home Health Care of the Rockies,” said Alexandra Piot. Then Ted [McWhorter] asked us to be partners, and we said yes. But then as we got more and more involved, we realized things were not right.” Legal wrangling The case of Patrick and Alexandra Piot vs. Edward S. McWhorter a/k/a E.S. McWhorter a/k/a Ed McWhorter a/k/a Ted McWhorter, Dennis McWhorter, Dennis Brunet, Home Health Care of the Rockies, Inc., Home Health Care of the Rockies Private Duty, Inc., and PDI of Louisiana claims that the defendants defamed the Piots, intimidated their customers, violated state antitrust laws and federal securities laws, and committed fraud first to take the Piots’ money and then keep them from competing in the market for home health services.
“I’d say it’s a pretty unusual case, especially with all the different ins and outs,” said the Piots’ attorney, Ira Karet. “It seems there were so many people left without funds, left without pay, left without nursing.”
In April 1997, the Piots agreed to buy 50 percent of Home Health Care of the Rockies for $150,000, with $40,000 down and a promissory note for the rest, according to the lawsuit. As part of the partnership agreement, Patrick Piot was named director of nursing and promised a $100,000 annual salary; soon after, he was also named CEO. Alexandra Piot was also hired on as office manager at a salary of $40,000.
The Piots claim the investment was a bogus deal from the start, partly because no one at Home Health Care notified them of a 1995 promissory note pledging $120,000 of the firm’s assets to Edward McWhorter’s PDI of Louisiana, and partly because state and federal authorities were never notified of the transaction involving the Piots.
“The outstanding liability of HHC to PDI was not disclosed by the defendants to the Plaintiffs prior to the transfer of HHC stock [to the Piots],” the lawsuit alleges. “The failure to disclose this liability constitutes the omission of a material fact which should have been disclosed, and if it had been disclosed, Plaintiffs would not have proceeded with the transaction.”
And once they were in business with McWhorter, the Piots claim they found Home Health Care’s books in disarray. The firm was already $9,000 behind in payroll taxes owed to the state and federal governments, and the Piots allege that McWhorter continued to divert funds from the company’s corporate account that had been set aside for payroll taxes.
Following Patrick Piot’s resignation as CEO on Sept. 11, 1998 and subsequent departure as director of nursing 10 days later, the Piots were informed that they were personally liable for the unpaid taxes. Their lawsuit asks the court to hold both Edward McWhorter and his partners responsible, because while he emptied the corporate bank account to a point where the taxes couldn’t be paid, Dennis McWhorter and Dennis Brunet did nothing to stop him. Things turn nasty Then, in late 1998, when the Piots went into business for themselves, things turned nasty. “Defendant Edward S. McWhorter … sent letters to Patrick Piot’s patients, prospective patients and business associates urging them not to do business with Patrick [Alexandra] Piot and calling Patrick Piot a thief and a liar,” the lawsuit reads.
Such letters, at the center of the Piot’s claims of defamation, were sent to Francine Bosselaar, Ken Matheson, John and Julie Hawkins, state agencies and private hospitals that said the Piots were committing illegal acts, under investigation for criminal activity and were “disreputable and dishonest and were thieves.”
The Hawkins family in Carbondale received one such letter on Sept. 15, 1998, four days after Patrick Piot resigned as CEO and six before he quit as director of nursing. Tanner Hawkins, now 4, was born with the same condition as Saige Blotske. He was one of Home Health Care of the Rockies’ first patients.
“We are finally entering court today to restrain the Piots from any further patient and nurse tampering,” says the unsigned letter on Home Health Care stationary. “They have defaulted on $40,000 in payroll taxes, have a 63 percent Medicare claim rejection, and are being examined for fraudulent or inappropriate billings to Medicare … .
“More important, they have misappropriated over $200,000 in corporate funds, and have apparently embezzled some $40,000, including several of Tanner’s checks.”
The letter writer, whom the Hawkins believe is Ted McWhorter, adds that the Piots are under investigation by the Glenwood Springs police and the district attorney’s office, and indicates the FBI is investigating them for wire and postal fraud.
In the second to last paragraph, McWhorter, who lives in Eunice, La., says he plans to remain in Colorado for the remainder of the year running the company. He writes: “I think it is impossible to find competent administrators here. This is the sickest bunch of fruitcakes I have ever encountered.” It ends with typed words “Thanks again, Ted.”
The Piots are asking the court to find McWhorter liable for damages from lost business, defamation and fraud. The final amount, if any is awarded, will be determined by the court.
McWhorter’s legal response has so far been tepid. One attorney representing him has been disbarred, another who has withdrawn for lack of payment, and last fall he showed up at a court conference without representation.
Larry Elliot, the attorney who was disbarred for abandoning his clients, filed a 36-page lawsuit on behalf of Home Health Care in 1998 charging the Piots with fraudulent diversion of funds and interference with contracts through the surreptitious recruitment of both patients and nurses.
The complaint alleges the Piots, acting as officers of Home Health Care, diverted patient payments worth tens of thousands of dollars to their own accounts, and solicited business from those same patients away even while they were still working at Home Health. The court found the case frivolous and dismissed it last spring.
In addition to the Piot case, Home Health Care and McWhorter are defendants in a wage case filed by a former employee in Pitkin County Court. In 1996, the company was ordered by Garfield County Court to pay Dottie Anderson, RN for unpaid wages.
A conference and motions hearing on the Piots’ case is scheduled for Jan. 24 in Glenwood Springs.
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