Analysis Reveals Lack of Transparency and Penalties for Serious Errors in Rehab Hospitals

Rehabilitation hospitals, integral to helping patients recover from major surgeries and injuries, have become a highly profitable sector within healthcare. However, federal reports and inspections highlight troubling issues, including rare but severe incidents of patient harm and subpar safety performance, particularly at facilities operated by companies like Encompass Health Corp. Despite these serious problems, such as patient deaths and medication errors, federal agencies have not consistently disclosed these incidents to the public or applied significant penalties comparable to those in nursing homes.

For example, in 2021, a notable case involved Elizabeth VanBibber, a 73-year-old patient fatally poisoned by carbon monoxide at Encompass's Huntington, West Virginia hospital during ongoing construction. The hospital had been warned about safety precautions, yet a construction-related gas leak led to her death. The case is still pending in court, with allegations of neglect and failure to ensure a safe environment. Several other grave incidents include a patient found dead from an undetected health complication, and instances of medication errors resulting in fatalities. These incidents reveal systemic safety lapses, yet federal oversight often limits actions to routine inspections, and no fines were levied for many violations.

While some Encompass hospitals have been flagged for immediate jeopardy violations—conditions that pose imminent safety risks—these have rarely resulted in significant punitive measures, as Medicare law does not permit fines for safety violations in rehab hospitals, unlike in nursing homes. The sole exception involved a California hospital fined for a medication error after a patient’s death.

Encompass, which owns 168 hospitals and is a major player in the industry, has expanded rapidly, often entering new markets by partnering with local nonprofits and persuading them to shutter rehab units in exchange for shares. The company's financial health is robust, with declining but still significant profits, and it has a controversial history, including past involvement in massive accounting fraud under its former incarnation as HealthSouth.

In addition to safety concerns, medication errors remain prevalent. Inspection reports documented cases where patients received incorrect or improper medications, sometimes with fatal consequences. Despite these risks, federal oversight is limited, and measures like star ratings for rehab facilities—common for nursing homes—are not yet implemented, leaving consumers without transparent safety and quality information.

Overall, the current system fails to sufficiently penalize or disclose grave errors in rehab hospitals, putting patients at risk without adequate oversight or accountability. Industry experts and advocates argue that stronger enforcement and public reporting are critical steps needed to improve safety and transparency in this crucial healthcare sector.

source: https://medicalxpress.com/news/2025-07-grave-errors-rehab-hospitals-unpenalized.html