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1 Page 1 1 IN THE COURT OF COMMON PLEAS CUYAHOGA COUNTY, OHIO 2 ESTATE OF LEONA MAXIM, 3 etc., Plaintiff, CASE NO. CV VS. Judge Shirley Strickland 5 Saffold KINDRED NURSING & REHAB - 6 STRATFORD, et al., Defendants ORAL DEPOSITION OF ERNEST TOSH 12 JULY 27, ORAL DEPOSITION OF ERNEST TOSH, produced as a 16 witness at the instance of the Defendants, and duly 17 sworn, was taken in the above-styled and -numbered cause 18 on July 27, 2016, from 10:31 a.m. to 11:55 a.m., before 19 Angela L. Mancuso, CSR No in and for the State of 20 Texas, reported by Stenographic method, at the offices 21 of, 300 Throckmorton Street, 22 Suite 1600, Fort Worth, Texas, pursuant to the Ohio 23 Rules of Civil Procedure, Notice, and any provisions 24 stated on the record. 25 Job No

2 Page 2 1 A P P E A R A N C E S 2 FOR THE PLAINTIFF: 3 MR. WILLIAM B. EADIE 4 SPANGENBERG, SHIBLEY & LIBER 1001 Lakeside Avenue, East 5 Suite 1700 Cleveland, Ohio (216) william.eadie@spanglaw.com 7 8 FOR THE DEFENDANTS: 9 MR. PAUL W. McCARTNEY BONEZZI SWITZER POLITO & HUPP CO. L.P.A Walnut Street Suite Cincinnati, Ohio (513) pmccartney@bsphlaw.com

3 1 INDEX Appearances... 2 ERNEST TOSH Examination by Mr. McCartney Examination by Mr. Eadie Changes and Signature Reporter's Certification REPORTER'S NOTE: Quotation marks are used for clarity and do 24 not necessarily reflect a direct quote. 25 Page 3 PAGE

4 Page 4 1 P R O C E E D I N G S 2 (July 27, 2016, 10:31 a.m.) 3 (Witness sworn by reporter) 4 ERNEST TOSH, 5 having been first duly sworn, testified as follows: 6 EXAMINATION 7 BY MR. McCARTNEY: 8 Q. Would you please state your full name. 9 A. Ernest Charles Tosh. 10 Q. Mr. Tosh, my name is Paul McCartney. I 11 represent the defendants in the lawsuit that's been 12 filed on behalf of the estate of Leona Maxim, in the 13 Court of Common Pleas of Cuyahoga County, in Ohio. I'm 14 going to be taking your deposition today. 15 Have you given a deposition before? 16 A. Yes. 17 Q. On how many occasions have you given depos? 18 A. One other one. 19 Q. And in what circumstances did you give that 20 deposition? 21 A. Similar to this one. It was a testifying 22 expert about CMS cost reports. 23 Q. And when did you give that deposition? 24 A. Earlier this spring. 25 Q. Do you recall the name of the case?

5 Page 5 1 A. I do not remember the case. The plaintiff's 2 attorney on that case was Joseph Earley from Paradise, 3 California. 4 Q. Do you remember the name of the defense 5 lawyer? 6 A. Tom Hall. 7 Q. I assume, also from California? 8 A. Yes. 9 Q. Do you remember -- did it involve a skilled 10 nursing facility or nursing home? 11 A. Yes, it did. 12 Q. Do you remember the name of the nursing home? 13 A. No. 14 Q. Do you remember whether it was part of a 15 company of nursing -- that owned several nursing homes 16 or operated several nursing homes? 17 A. Yes, it was. 18 Q. What was the company? 19 A. Lifehouse. I think that's one word, 20 L-i-f-e-h-o-u-s-e. 21 Q. Had you ever heard of Lifehouse before you 22 gave a deposition in that case -- or were retained in 23 that case, I should say? 24 A. No. I'm not familiar with them. 25 Q. You are a licensed attorney?

6 Page 6 1 A. Yes, sir. 2 Q. How long have you been a licensed attorney? 3 A. Twenty-six years. 4 Q. What is the nature of your practice? 5 A. Medical malpractice here in Texas, primarily. 6 Q. And do you have a specialty? Is there 7 concentrations within the field of medical malpractice? 8 A. Yes. Nursing home litigation. 9 Q. What percentage of your practice would you 10 estimate -- of your attorney practice would you estimate 11 is nursing home litigation? 12 A. Ninety percent or so. 13 Q. Have you ever sued a Kindred facility? 14 A. Yes. 15 Q. On how many occasions have you sued a Kindred 16 facility? 17 A. I would estimate maybe three or four times. I 18 don't think it's more than that. 19 Q. Do you have any cases presently active against 20 a Kindred facility? 21 A. I could not tell you. I'm not exactly sure. 22 I know we settled one recently with Kindred. But I 23 don't know if I have any current ones against Kindred. 24 Q. Have the three to four cases that you've had 25 against Kindred facilities, have they involved nursing

7 Page 7 1 homes or some other kind of facility or service? 2 A. The two most recent ones, I believe, were 3 postacute care hospitals. 4 Q. Healthtex? 5 A. Yeah. Not specifically nursing homes like 6 SNFs. I'm not -- I'm not sure that we've ever -- I'm 7 not sure that Kindred has any SNFs in Texas. If so, I 8 don't think I've sued an SNF that was a Kindred 9 facility. 10 Q. How long have you been doing nursing home 11 litigation as an attorney? 12 A. About five years. 13 Q. What made up your practice before you filled 14 in that 90 percent? 15 A. I was board certified in criminal law and had 16 been both a prosecutor and a defense attorney; and then 17 a friend introduced me to nursing home litigation, and 18 it was kind of like crack and I got addicted. 19 Q. Would you have an estimate as to the number of 20 pending cases you have against nursing homes? 21 A. My law firm, which is not just me doing it, 22 we've got three attorneys that do nursing home 23 litigation. I think we currently have about a hundred 24 pending nursing home cases. 25 Q. Before approximately five years ago, had you

8 Page 8 1 handled any nursing home cases? 2 A. No. 3 Q. As an attorney, I should say? 4 A. No. 5 Q. And the two most recent cases that you settled 6 with Kindred, do you recall the name of the attorney for 7 Kindred? 8 A. No. 9 Q. Were those cases pending in the 10 Dallas-Fort Worth area? 11 A. Yes. 12 Q. Have you ever sued a Kindred facility outside 13 of the state of Texas? 14 A. I don't believe so. 15 Q. Do you practice at all outside the state of 16 Texas? 17 A. I am not licensed outside of Texas, but I do 18 have some cases that I work on outside of Texas with 19 local counsel there. Mississippi, I think I have one 20 case in Oklahoma, and maybe one case in Colorado. 21 Q. Do any of those cases involve a Kindred entity 22 as a defendant? 23 A. I don't believe so. 24 Q. Now, you mentioned that you've given one 25 deposition in the past related to a staffing issue as an

9 Page 9 1 expert. 2 Have you ever testified in court as an expert 3 on staffing issues? 4 A. I have not. 5 Q. How many cases have you been retained, 6 approximately, to look at in terms of analyzing whether 7 there was a staffing issue in a nursing home? 8 A. I would say in excess of Q. Have any of those in the past involved a 10 Kindred facility? 11 A. Yes. 12 Q. Were any of those in suit? 13 A. I would -- I would believe some were, but I'm 14 not exactly sure. 15 Q. Did you submit reports in any of the other 16 cases involving a Kindred facility? 17 A. That would kind of depend on what you mean by 18 a report. I do a lot of spreadsheet work where I 19 analyze all their cost report numbers. And if that's 20 considered a report, then every one of those cases would 21 have a report. As far as a more detailed, like written 22 summary, like a designation by an expert, there has only 23 been a handful. 24 Q. I'm looking for something more along the lines 25 of what you did in this case.

10 Page 10 1 A. Okay. Then probably three or four. 2 Q. Have any of the other cases in which you've 3 done a report involved a Kindred facility? 4 A. No. 5 Q. Do you remember the names of the companies 6 involved in the other cases? 7 A. No, I do not. 8 Q. Other than maybe you gave -- did you do a 9 report in the case you gave a deposition in? 10 A. Yeah. Lifehouse. Uh-huh. 11 Q. How long have you been working analyzing as a 12 non-attorney, so to speak, staffing levels at nursing 13 homes? 14 A. About five years. 15 Q. And is that through -- was it Full Financial, 16 LLC? 17 A. Yes. 18 Q. Does that have a Web site? 19 A. No. 20 Q. What is Full Financial, LLC? 21 A. That is a LLC that I own that basically does 22 the financial analysis on SNFs. 23 Q. And how did five years ago you get into doing 24 this analysis? 25 A. At that time, a good friend of mine needed

11 1 some assistance in reading and trying to understand cost 2 reports, and he knew that I had a financial background, 3 and so we went to lunch and he showed me some cost 4 reports, and I went through them with him, and his law 5 firm asked if they could hire me to do some consulting 6 on that. And I agreed. And that's how it started. 7 Q. To date, do you know of any cases which you've 8 been retained in which you've been precluded as serving 9 as an expert by a Court? 10 A. No. 11 Q. Do you know of any cases in which the Court 12 has held that you are an expert on staffing issues in 13 nursing homes? 14 A. No. 15 Q. And I'm saying nursing homes. You're saying 16 SNFs or SNFs? 17 A. Right. 18 Q. We're talking the same thing, right? 19 A. Exactly. 20 Q. Okay. You understand what I mean when I say 21 nursing homes? 22 A. Yes. 23 Q. And I understand what you mean when you say 24 SNFs or SNFs. All right? 25 A. Yes, sir. Page 11

12 1 Q. So what is your background that leads you to 2 believe that you're an expert in determining whether 3 staffing is adequate or not in a nursing home? 4 A. My educational background is that I have a 5 Bachelor's of Business Administration in finance with 6 significant hours in economics, accounting, mathematics, 7 and computer science. 8 With that educational background, I'm able to 9 look at the cost reports and the information provided by 10 the federal agency that oversees nursing homes, CMS, and 11 do a comparison and analysis based on that publicly 12 available data. 13 Q. When did you graduate from college? 14 A Q. Other than over the last five years doing 16 these staffing analyses, have you been involved at all 17 in finance since you graduated in 1987? 18 A. I would say yes in that I've run law firms in 19 the past that I've been a member of, you know. So as 20 far as that portion of it, yes. I did not ever take my 21 degree and go into stockbroking or banking or anything 22 like that that you would normally do with a finance 23 degree. 24 Q. Do you have any kind of background in the 25 nursing home industry? Page 12

13 Page 13 1 A. Not outside of doing this analysis and the 2 litigation that I've been involved in. 3 Q. Never been licensed as a nursing home 4 administrator? 5 A. No, sir. 6 Q. Never worked for a nursing home company at 7 all? 8 A. No, sir. 9 Q. Have you had anybody review the process by 10 which you go about analyzing staffing levels to 11 determine whether it's a sound process or not? 12 A. I have discussed it with a couple of CPAs, but 13 I wouldn't say that I hired them to analyze it. 14 Q. You are not a CPA; is that correct? 15 A. No, I'm not. 16 Q. You do not have an accounting degree; is that 17 correct? 18 A. That is correct. 19 Q. Do you know of any literature out there that 20 has suggested the method that you follow is an 21 appropriate method in terms of determining or analyzing 22 whether staffing is appropriate in a nursing home? 23 A. Yes. It's the -- if you consult the Technical 24 Users' Guide for CMS's Five-Star Rating System, the basically their methodology is what I use.

14 1 Q. What is the Five-Star Rating System? 2 A. It is CMS's way of comparing nursing homes, 3 where they grade them on their RN staffing, overall 4 staffing, health inspections, quality measures, and then 5 all of those are then used to calculate an overall star 6 rating between 1 and 5. 7 Q. Would you agree with the following -- agree or 8 disagree with the following statement: Nursing staffing 9 levels are just one part of staffing; the actual skill 10 and turnover of the staff are also important and aren't 11 represented in the numbers in the Five-Star System? 12 A. Yes, I would agree with that statement. 13 Q. Are the numbers that CMS -- in the Technical 14 Users' Guide that you referenced, are the numbers in 15 terms of staffing, are those required numbers? Expected 16 numbers? Suggested numbers? Recommended numbers? 17 A. CMS phrases it as expected staffing. 18 Q. Would you agree with me that expected is not 19 the same as required? 20 A. Yes. 21 Q. Would you agree with me that in terms of 22 staffing levels, what is required of a nursing home is 23 to do what a reasonable nursing home would do under like 24 or similar circumstances or conditions? 25 A. Yes. Page 14

15 1 Q. And in terms of the expected staffing levels 2 through the Technical Users' Guide from CMS, do you have 3 any idea what percentage of nursing homes in the 4 United States meet those expected numbers, exceed those 5 expected numbers, or are below those expected numbers? 6 A. No. I'm not aware of those. 7 Q. Are there facilities that have appropriate 8 staffing yet don't meet the expected number from the CMS 9 Technical Users' Guide? 10 A. I don't think -- could you explain what you 11 mean by "appropriate staffing"? 12 Q. Staffing that is reasonable for a nursing home 13 under like or similar circumstances or conditions. 14 A. That doesn't meet CMS's expected staffing 15 levels? 16 Q. Yes. 17 A. I don't think so. 18 Q. So in your mind, the expected levels are the 19 floor for what a nursing home must do in terms of 20 staffing? 21 A. Correct. 22 Q. Has CMS ever held that? 23 A. Have they issued a statement that says that? 24 Q. Yes. 25 A. Not that I'm aware of. Page 15

16 1 Q. Do you know of any Court in the United States 2 that has held that the expected staffing levels from the 3 Technical Users' Guide from CMS creates a floor for the 4 amount of staffing a facility must have? 5 A. I'm not aware of a ruling either way on that, 6 no. 7 Q. Are you aware of any kind of study that has 8 looked at the expected levels from the CMS Technical 9 Users' Guide and determined whether or not the failure 10 to meet the expected levels increases the chances of a 11 resident suffering any kind of injury as a result? 12 A. Yeah. I believe there is actually -- in the 13 Technical Users' Guide there is a reference to a study 14 performed by a group out of California led by a -- I 15 believe it's an RN by the name of Harrington that 16 discusses increased injuries when staffing levels are 17 lower. 18 Q. And if I remember correctly, that article 19 didn't directly look at the CMS expected user guide. Is 20 that correct? 21 A. Right. Right. I don't think -- yeah, it's 22 referenced in the users' guide. So I don't imagine it 23 was the basis of the investigation. 24 Q. And wasn't the premise of Harrington's 25 article -- is that the 2004 article that you're Page 16

17 Page 17 1 referencing? 2 A. I believe that's correct. 3 Q. Wasn't the premise of the -- the conclusion of 4 the article more that facilities with more staffing have 5 lower injury outcomes, so to speak? 6 A. I believe that is the general premise, yes. 7 Q. I don't remember. Did they actually suggest 8 an actual number of what staffing should be? 9 A. Like a State minimum type of number? 10 Q. Yes. 11 A. No. I don't think they ever did that. 12 Q. And I think I asked you this question. You've 13 taken depositions, too, I'm sure. 14 A. A few. 15 Q. And I'm sure you've been in a situation, too, 16 where you're not sure if you asked a question, so you 17 repeat it. So if I'm repeating a question, you can even 18 say, Paul, you already asked me that one, and I'll say 19 okay. 20 Do you have any information as to what 21 percentage of nursing homes in the United States are 22 meeting or exceeding the expected staffing levels from 23 the CMS Technical Users' Guide? 24 A. No. 25 Q. Now, CMS in that -- CMS has the power to

18 Page 18 1 regulate nursing homes to a certain extent; is that 2 correct? 3 A. That is correct. 4 Q. And one of the things they would look at for a 5 nursing home in terms of deciding whether they could be 6 a Medicare or Medicaid provider is whether or not the 7 staffing levels are sufficient; is that correct? 8 A. Correct. 9 Q. And they could choose to decide that a 10 facility would no longer be a Medicare or Medicaid 11 recipient if they believed the staffing levels were 12 insufficient; isn't that correct? 13 A. Yes. 14 Q. Do you know how many nursing homes in a given 15 year they revoke their ability to be Medicare or 16 Medicaid providers based on staffing alone? 17 A. No. 18 Q. Do you know whether -- and I'm going to call 19 it Stratford. You know what I mean? That's Kindred the facility Kindred Transitional Care and 21 Rehabilitation - Stratford? 22 A. Correct. 23 Q. I'm going to call it Stratford so I don't have 24 to say all that. 25 Do you know whether Stratford ever had its

19 Page 19 1 ability to be a Medicaid or Medicare provider revoked 2 because it was not providing adequate staff? 3 A. I do not know. 4 Q. And how often does CMS take a look at a 5 facility to determine whether or not it's providing 6 appropriate staff? 7 A. I believe it's once a year when they do their 8 inspection. 9 Q. Now, you agreed to the statement earlier that 10 staffing is just but one component -- or the level of 11 staffing is just one component of staffing. 12 Would you agree there are situations in which, 13 because of the staff and how the staff are allocated, 14 they might be below the CMS Technical Users' Guide's 15 expected level of staffing and still providing 16 reasonable care? 17 A. Are you asking is it possible or probable? 18 Q. I'm asking if it's possible, and then I will 19 ask you if it's probable. 20 A. Okay. I will say it's possible. 21 Q. You do not believe it's probable? 22 A. I do not believe it's probable. 23 Q. Well, would you agree that even a facility 24 that is below the CMS expected levels of staffing could 25 at times be providing appropriate care?

20 1 A. I think if a facility was within a very close, 2 you know, hours per patient per day, or HPPD, if they 3 were very close to the CMS expected staffing levels, 4 then on any given day they might be able to provide 5 services. But I think as you get farther and farther 6 away from that expected staffing number, the probability 7 of that occurring becomes much more remote. 8 Q. And on what do you base it that you do not 9 believe it's probable they can provide appropriate care 10 below the CMS Technical Users' Guide's expected staffing 11 level? 12 A. Because the expected staffing levels are 13 correspondent with the, in your case, Kindred Stratford 14 submitted MDSs, or minimum data sets, that contained the 15 RUG score or the care requirement for each of the people 16 in their facility, so when CMS looks at all those care 17 requirements or all the RUGs, that's how they calculate 18 their expected staffing level. So that's the acuity of 19 the facility. Page And CMS has done massive time studies that 21 says to take care of each of these people, at different 22 RUG levels, takes X amount of time for each of the RNs, 23 LVNs, CNAs. So when you look at those time studies and 24 the acuity of the individuals in this facility, that's 25 what CMS does to get their expected staffing level.

21 1 So to say that you could routinely deliver 2 reasonable medical care while being under the CMS 3 expected staffing levels, I don't think that that's 4 probable. 5 Q. Do you have any scientific data, any kind of 6 studies that have been done to support that conclusion 7 that you've made? 8 A. Yeah. I believe the STRIVE study in would be consistent with that. 10 Q. The Strauss study? 11 A. STRIVE, S-T-R-I-V-E. And that's an acronym. 12 I don't know exactly what all the words are there. But 13 it's a CMS study that was published in Q. Do you know if there are any nursing homes in 15 this country that are meeting or exceeding the CMS 16 Technical Users' Guide expected staffing level? 17 A. Yes, there are. 18 Q. But you don't know the percentage? 19 A. No, sir. 20 Q. Do you have a copy of your report? If you'd 21 like to refer to your report, I didn't bring a copy with 22 me. 23 A. I've got it on my computer. Page Q. If you'd like -- I don't want -- this is not 25 meant to be a memory contest for you. If I ask a

22 1 question and which you want to refer to your report, 2 please don't be afraid to say -- just go ahead and look 3 at it. 4 A. Okay. 5 Q. Did you specifically look at June 3rd, 2013, 6 to determine whether or not the staffing on that 7 particular day was appropriate? 8 A. Yes. 9 Q. And what did you determine? 10 A. That it was not. 11 Q. And how did you go about determining that on 12 June 3rd, 2013, that the staffing was not appropriate? 13 A. By taking the actual staffing timecards that 14 you provided to the plaintiff in this case, I was able 15 to determine the hours per patient per day based on the 16 census that you also provided, and could calculate the 17 amount of nursing care that was available per patient 18 per day for the month of June, subsequently June 3rd, 19 and then compare that to CMS expecteds for that quarter. 20 Q. What was the HPPD for June 3, 2013? 21 A. Do you have that I sent? I've got that 22 on my computer. It was -- well, I know it was 3.2 or I'm not sure exactly which one it was, though. 24 That's close enough? Page Q. Whether it was 3.2 or 3.3, you're saying that

23 Page 23 1 was inadequate? 2 A. Correct. 3 Q. What should it have been that day? 4 A. That quarter, CMS says that it should have 5 been Q. But that's over 90 days, approximately? 7 A. Correct. Now, for me to determine what the 8 expected should have been on that particular day, I 9 would need to have the individual RUG scores for the 10 individuals that were in the facility that day. 11 Q. Does the CMS expected staffing level take into 12 account time that residents spend in therapy on a given 13 day? 14 A. Their calculations do not include therapy 15 hours. It is just RNs, LVNs or LPNs, and CNAs, not 16 therapy. 17 Q. Since -- and I don't know -- I don't think 18 there is a date on your report. Maybe I'm missing it. 19 A. It would have been, I think, in mid-june, 20 maybe. 21 Q. Well, and I might be off by a day or two, but 22 I think it was sent to me on June 10th. 23 A. Okay. 24 Q. So is it something you completed, say, within 25 a week of that date?

24 Page 24 1 A. Yeah. I would think so, yeah. 2 Q. Have you reviewed any additional materials 3 relative to this case since June 10th of 2013? 4 A. The staffing information that we just talked 5 about that was provided by the defense. 6 Q. The Timecard Lite reports? 7 A. Correct. 8 Q. You had not looked at those previously? 9 A. Correct. 10 Q. And if you look on page -- your first page 11 there, 3.b, you write, "The following records have been 12 provided or reviewed." And 3.b says, "Nursing home 13 staffing records including census data and staffing 14 data." 15 What was included in that that you A. I would have to go back and look at my stuff. 17 It's possible that I was provided the defense stuff at 18 that time and I didn't do the individual day calculation 19 until later. The individual day calculation stuff I 20 didn't do until recently. 21 Q. Okay. Have you done anything else since you 22 completed your report besides the individual day 23 calculation? 24 A. I don't believe so. 25 Q. And putting this in the gray area, we do not

25 1 know whether you just received the time -- you received 2 the Timecard Lite reports since your report or you had 3 them before, putting that in the gray area of we're not 4 sure, is there any other material that you may have 5 received and reviewed relative to this case since you 6 completed your report? 7 A. No, not all that. That's all I looked at. 8 Q. Have you seen the report that was produced on 9 behalf of the staffing expert for my clients? 10 A. Oh, yes. I can't remember that guy's name. 11 Q. Mark Levine? 12 A. Yeah, Levine. Yes, I did see that report. 13 Q. Do you have any disagreements with 14 Mr. Levine's conclusions? 15 A. Yes. 16 Q. What disagreements do you have with his 17 conclusions? 18 A. I think he concluded that the Kindred facility 19 was adequately staffed because it met or exceeded the 20 State minimum requirement in Ohio. And I do not believe 21 that that's an accurate analysis of if somebody is 22 staffed correctly or not. 23 Q. Why is that not an accurate analysis for 24 staffing? Page A. Because that doesn't take into account the

26 1 individual nursing care needs of each of the individuals 2 that are in the facility. 3 Q. How do you know what the individual nursing 4 care needs were for the residents? 5 A. I don't know their individual care needs 6 because I do not have access to each of their individual 7 RUG scores. But CMS uses those RUG scores to generate 8 the expected care or expected staffing levels. So all 9 of that was provided by Kindred to CMS, and so Q. Well, the RUG scores is a quantitative 11 analysis, and there will be residents that will require 12 that amount of care with their RUG score and others that 13 require less even with the same RUG score. Isn't that 14 true? 15 A. There would be a certain amount of 16 variability. 17 Q. And without really going through each 18 individual resident's chart at the facility on June 3rd, 19 you wouldn't be able to determine whether -- how much 20 staffing was needed on that particular day, would you? 21 A. No. I think when you look at each of their 22 individual RUG scores, each one of those RUG scores has 23 a certain amount of medical care attached to it, and as 24 such you can get a general idea of how much staffing 25 they should have. Page 26

27 Page 27 1 Q. You mentioned that you disagreed with the 2 methodology of Mr. Levine and how he concluded that 3 Stratford was appropriately staffed, and you mentioned 4 that because he used the Ohio -- the State regulations 5 on staffing? 6 A. Right. 7 Q. And you said that was not an appropriate way 8 to do it? 9 A. Correct. 10 Q. Any other criticisms you have of Mr. Levine's 11 methodology? 12 A. Not off the top of my head. My biggest issue 13 was that he didn't take into account the acuity. 14 Q. Of course, your analysis doesn't take into 15 account the skill level of the individual nurses and 16 other staff? 17 A. Right. I don't know of any analysis that does 18 that. 19 Q. Well, the Five-Star Rating does look at things 20 like that, doesn't it? 21 A. The skill level? 22 Q. The competency of the staff. 23 A. The Five-Star Rating looks at how much 24 staffing time they have. I believe Q. Well, maybe I'm getting this from page 6 of

28 1 your report, paragraph 29. You say, "In reviewing 2 staffing for sufficiency there are five general areas of 3 review." And the second one is, "Quality refers to the 4 amount of training, scope, and competency of the staff." 5 A. Right. Right. That's just in general. I 6 wasn't saying that that was part of the Five-Star Rating 7 System. 8 Q. Okay. And I think I confused the two. I 9 remembered that from somewhere. I thought it was from 10 Five-Star. It was from your report. 11 And where did you get these five elements? 12 A. Discussions with my experts that I've used in 13 my litigation, you know. 14 Q. What experts have you used in your litigation? 15 A. Facility administrators, nursing experts, 16 medical experts, certified medical directors of nursing 17 homes. I've also had discussions with another 18 individual that does staffing analysis and depositions 19 on that type stuff. 20 Q. And this other individual, what is that 21 individual's background? 22 A. She's from Florida and was involved in Page Florida's state medical -- I can't remember the exact 24 name, but anyway, it was medical care provided by the 25 State of Florida, and she was involved in that area but

29 Page 29 1 not in medical providing. She was in some kind of 2 financial area. 3 Q. Do you believe that the turnover ratio of a 4 facility plays any role in whether there is appropriate 5 staffing or not? 6 A. I believe the turnover ratio can certainly 7 affect the quality of the staffing, but I don't think 8 that that really -- are you asking if that plays into 9 how much staffing they should have? 10 Q. Yes. 11 A. Yeah. I would say generally it probably does. 12 I don't know how you would quantify that. 13 Q. What about the number of admissions and 14 discharges on a particular day? 15 A. Yes. That can affect -- that could certainly 16 affect your staffing levels. 17 Q. Or the number of residents out to a hospital 18 or to a doctor's appointment on a given day? 19 A. Yes, because that would change your census. 20 Q. Did you look at Stratford in terms of 21 comparing its quality indicators versus those of other 22 nursing homes in the state or those in the 23 United States? 24 A. Quality indicators meaning the quality 25 indicators used in the Five-Star Rating System?

30 Page 30 1 Q. Yes. 2 A. No, I did not. 3 Q. Do you believe that would be an important item 4 to look at to determine whether or not a facility is 5 providing appropriate staff? 6 A. I believe that can be an indicator, although I 7 would not say that it's an important indicator because 8 that is self-reported information, and I'm not -- you 9 know, with my experience, I'm not exactly sure they 10 always self-report that accurately. 11 Q. Well, that would be reflected across a large 12 body, and so that would sort of even up, wouldn't it? 13 A. Are you saying across a large Q. Well, if you're looking at the number of, say, 15 quality indicators -- say, let's talk about Foley 16 catheters. 17 A. Uh-huh. 18 Q. Every facility in the state of Ohio reporting 19 it, that should even out in terms of those that report 20 accurately and don't report accurately? 21 A. Oh, right. Across a large sample, yes, the 22 individual facility would get evened out. 23 What I'm saying is, if I'm looking at a 24 specific facility, I'm not sure how much I trust their 25 specific quality indicators because I know those are

31 1 self-reported, and maybe the facility I'm looking at was 2 not completely honest in their discussions on that 3 point. 4 Q. Do you have any information as to whether or 5 not Stratford was honest in their reporting of quality 6 indicators? 7 A. No, I do not. 8 Q. Do you have any information as to how the 9 staff was deployed at Stratford in 2013? 10 A. I have their timesheets that say when they 11 checked in and checked out, so I can see what their 12 staffing level was. But as far as like who was assigned 13 to what area, I don't believe I have that information. 14 Q. Do you know anything about the quality of the 15 supervision, quality assurance planning and methods for 16 determining staffing resources at Stratford in 2013? 17 A. No. 18 Q. If you could turn to page 8, please, of your 19 report. 20 A. Yes, sir. 21 Q. The middle block, LVN Time A. Yes. 23 Q. -- which, in Ohio, we refer to as LPNs A. Okay. 25 Q. -- the second quarter number under LVN Page 31

32 1 Expected, it's That seems to be -- all the other 2 numbers are vastly different. Why is that one such a 3 large number compared to the other ones? 4 A. Let me pull that up on my computer just to 5 make sure, because the actual difference out here to the 6 side, that doesn't add up with that number. 7 Q. I was thinking that might be a typo. 8 A. Yeah, I think it is a typo -- 9 Q. Okay. 10 A. -- because if that was the actual expected, 11 because this is in hours, there is no way they expected 12 you to have 47 hours of LPN time. 13 Q. And that's why I just asked. 14 A. So, yeah, that's -- if you want me to check, I 15 can check. But I'm sure that's a typo. 16 Q. I would like to find out what you believe the 17 actual -- I mean, I guess we could add reported and 18 difference and come up and that would be A. Yeah. It's supposed to be is the 20 expected -- I'm sorry -- is the reported. The expected 21 is supposed to be And so the difference would be Q. Okay. So I'm getting is that they reported 24 more LPN time than was expected. 25 A. That is correct. Page 32

33 Page 33 1 Q. And that goes to your whole discussion is that 2 Stratford was using more LPN time than RN time? 3 A. Correct. 4 Q. And still between the two, if I remember 5 correctly, that the total time, staff time, would be 6 acceptable to you. Is that fair? 7 A. I'm sorry. The total licensed time? 8 Q. Yes. 9 A. Okay. The total licensed time that they 10 reported, so you're adding RNs, plus LPNs -- let's see 11 here -- would be basically 1.7 hours, and the 12 expected -- CMS expected total licensed time for that 13 quarter is Q. Could you say those again, please. I'm sorry. 15 A. Sure. 1.7 reported, 2.2 expected. 16 Q. Correct me if I'm wrong because I might be 17 wrong about this. CMS, in terms of their analysis, 18 looks at RN time and total licensed time; is that 19 correct? 20 A. They -- CMS looks at RN time, LPN time, and 21 CNA time. Now, they also calculate a combined license 22 time. 23 Q. Is it -- maybe I'm -- and I might just be 24 misremembering this. In terms of the Five-Star Rating 25 at least, the two factors they look at is the RN time

34 Page 34 1 and the total licensed time; is that right? 2 A. To determine the star rating? 3 Q. Yes. 4 A. I'd have to go back and look at the users' 5 guide for that. I don't remember that formula off the 6 top of my head. But I think CNA time is actually in 7 that calculation. 8 Q. It might be. I think it is, that it might be 9 all three. 10 A. Uh-huh. 11 Q. Those are the two numbers they look at to 12 determine the star rating for staffing A. Uh-huh. 14 Q. -- at least part of how they determine 15 staffing is that. You're not sure. I might be right; I 16 might not be? 17 A. Right. I'm just saying I know they look at 18 all three of those classifications. I don't remember 19 exactly how much they weigh each one of them. I know 20 that RN time has its own star rating and then total 21 staffing has a star rating. 22 Q. That might be the better way to say it than 23 I've been trying to say it. 24 A. So -- but there is no star rating for just 25 licensed time, so -- although they do, like I say,

35 1 report that in one of their expected categories. 2 Q. And I'm not trying to underestimate what you 3 have done, but you came to this calculation as to 4 Stratford was inadequately staffed based on the RUG 5 scores and what CMS's expected staffing level would be 6 on those, the number of residents versus what it 7 actually was? 8 A. Correct. 9 Q. And so it's a calculation that anyone with 10 some kind of mathematical smarts could probably figure 11 out on their own? 12 A. Right. I mean, CMS's expected staffing stuff 13 is publicly available. 14 Q. You're just A. And then Kindred's cost reports, their CMS 16 cost reports they file every year is -- there's staffing 17 information in there. That's where we got Kindred's 18 staffing information. So, yeah, it's all publicly 19 available if you know where to look for it, and then 20 just, you know, do your very simple math to figure it 21 out. 22 Q. It's an equation, basically? 23 A. Yeah. Page Q. What is the significance of your discussion in 25 here about payments to related parties and overpayments

36 Page 36 1 to related parties? 2 A. Corporations -- I'm going back to make sure we 3 have an understanding of related parties. Corporations 4 such as Kindred have a overriding corporation. They 5 also have many, many, many subcorporations, one of 6 which, of course, owns Stratford. 7 They also may own a corporation that has a 8 pharmacy, therapy services, management services, any 9 number of other type of services that can be purchased 10 by their facility. In this case, Stratford could 11 purchase all those services from those facilities that 12 are owned by Kindred. 13 So a related company is a company that has the 14 same or substantially the same ownership. And then what 15 we look at in that analysis is to try to figure out if a 16 facility is moving a large amount of money to its 17 related parties in an effort to move profits off of 18 their income statement into one of these satellite 19 companies that would then answer to the same parent 20 corporation. 21 Q. And why would they do that? 22 A. Why would they do that? 23 Q. Yes. 24 A. To basically show a lower income on their 25 income statement. So if someone is to look at their

37 1 income statement, they would not have an accurate 2 picture of how profitable that facility was. 3 Q. And how did you determine -- you must have had 4 some kind of formula for expected payments to related 5 parties. 6 A. It's not expected payments. It's basically 7 CMS requires -- in their annual filings, they have to 8 identify all related parties that they did business 9 with. 10 Q. Right. 11 A. They have to specifically state how much they 12 paid them, and then they also have to state how much it 13 cost the related party to provide that service to this 14 facility. So what we're looking at there is the cost of 15 providing the service versus the payments that were made 16 for those services. 17 Q. And do you know whether any accounting 18 principles are used to determine what the costs are to 19 provide those services? For instance, let's talk about 20 therapy. Let's say it's therapy. 21 A. Sure. 22 Q. Do you know whether there is any accounting 23 principles used to make that determination? Page A. Oh, I'm sure there are accounting principles 25 that would have to be used in making that determination.

38 1 Q. And is there anything wrong with the related 2 company making a profit on the services it provides? 3 A. That's -- no. I mean, I'm not saying that 4 they should or shouldn't make a profit. I'm just 5 identifying that they did make a profit. 6 Q. Well, overpayments, I mean, that word could be 7 profit to related parties rather than overpayments. 8 A. Yeah, however you want to phrase it. 9 Q. Well, it doesn't sound quite as pejorative 10 when you say profit rather than overpayments. Would you 11 agree with that? 12 A. Well, I mean, I would say that there's several 13 different ways. I mean, I don't want to get into 14 semantics. I mean, you could put, you know, the word 15 "siphon" there, "siphon to related parties," if you 16 really wanted to make it sound bad. 17 Q. And you've not looked at -- is there any kind 18 of industry standard as to what a related party can 19 receive in excess of the actual cost? Page A. There is no regulation as to that, as far as 21 CMS is concerned. CMS just wants them to identify the 22 related parties, the cost, and how much they were paid. 23 Q. This amount over what the actual cost was to 24 related parties, do you know whether that is -- that was 25 at Stratford in 2012 through 2014, whether that was

39 1 similar to what -- to the industry as a whole 2 experiences? More or less than what the industry as a 3 whole experiences? 4 A. I can't speak to the whole industry. I can 5 just speak to the -- you know, the ones that I've looked 6 at. 7 Q. And based on the ones you've looked at, what 8 is your experience? 9 A. That most of them move over, however you want 10 to put it, payments in excess of their costs they will 11 make to the related parties. 12 Q. Well, if they were hiring outside vendors to 13 provide the services, wouldn't you expect that they 14 would have payments in excess of the cost to the outside 15 vendors? 16 MR. EADIE: Could you repeat that or read 17 it back? 18 Q. (BY MR. McCARTNEY) Sure. If a facility 19 contracted with an outside vendor/unrelated party to 20 provide services, wouldn't you expect the outside vendor 21 to bill more than the actual cost to provide those 22 services? 23 A. I think what you're asking is would I expect a 24 third-party vendor to make a profit off their services. 25 Q. That's one way of saying it. Page 39

40 1 A. And I would say yes, I would expect them to 2 make a profit off their services. 3 Q. And do you know whether the profit, so to 4 speak, at Stratford from July 1, 2011, through June 30, , was in excess of what a reasonable profit was for 6 the payments to related parties? 7 A. No, I do not know. 8 MR. EADIE: Can we take a break? 9 MR. McCARTNEY: Sure. 10 (Recess from 11:25 a.m. to 11:41 a.m.) 11 Q. (BY MR. McCARTNEY) Are there any opinions or 12 testimony that you've given me so far today that you 13 need to change or want to change? I just ask -- I don't 14 have an issue with it, but I assume that you and 15 Mr. Eadie had stepped out to talk, and I wanted to make 16 sure that there wasn't something that needed 17 clarification before I went on. 18 A. No. He was just asking me about -- basically 19 reasking some of the questions you asked about staffing 20 stuff, and so we were going -- we were going over that. 21 Q. Okay. I'm not trying to ask what he talked to 22 you about necessarily, but this is a deposition, not a 23 trial, and so things are a little more, as you know, are 24 more lenient. I just want to make sure that there 25 wasn't anything missing there. Page 40

41 Page 41 1 Other than the opinions that we've expressed 2 today and the opinions you've expressed in the report 3 that was provided to me, do you have any other opinions 4 about this case that we have not discussed? 5 A. Just two seconds. You had asked me earlier 6 about if I had any thoughts or feelings on Kindred's 7 honesty in reporting on the Five-Star Rating System. 8 And I think it may have been specifically to quality 9 assurance. 10 Q. Quality indicators. 11 A. Yeah, quality indicators, or if it was a wider 12 question than that. 13 Q. Well, it was limited, I think, at that time to 14 quality indicators. Is your answer still the same? 15 A. On quality indicators, it is the same. 16 Q. Okay. Now, that leads me to believe that you 17 have some concern about the reliability of reporting 18 information of Kindred in some other areas. Would that 19 be fair? 20 A. Yes, that would be fair. 21 Q. In what other areas do you have some kind of 22 concerns? 23 A. In the analysis that I did, I noticed that 24 Kindred on their -- what's called a CMS Form 671, that 25 Kindred reported a higher staffing level on that form

42 1 than they did on their annual cost report, which is 2 known as a CMS Form The 671 is what the Five-Star staffing star is 4 calculated on. So it appears that they have overstated 5 their staffing in some of the time periods that we were 6 looking at. 7 Q. On which form? 8 A. On Q. Do you have any -- do you know whether the 10 person who did Form 671 is the same as the person that 11 did Form 2540? 12 A. I would not expect them to be the same person. 13 I expect the 671 was given to the inspector by the 14 facility administrator, and the 2540 was probably 15 prepared by somebody in the Kindred corporation 16 accounting office. 17 Q. And that alone could explain the discrepancy? 18 A. I wouldn't say that alone. 19 Q. Well, you have different reporters, and 20 different people reporting might report different 21 numbers. 22 A. Well, okay. Let me back up. Page The 671 is a two-week window of staffing right 24 before the inspector got to the facility. And the is an annual cost report. So it's going to be 52 weeks.

43 Page 43 1 So there will be a difference in numbers. 2 But I'm saying, when you look at their hours 3 per patient per day for their nursing numbers, they are 4 higher on the 671 than they are on the Q. But that's a two-week snippet versus a 6 52-week? 7 A. That is correct. 8 Q. Have there been any materials that you have 9 requested that you have not received? 10 A. That I have requested? 11 Q. Yes. 12 A. No. 13 Q. Do you believe that you received sufficient 14 materials in order to reach the conclusions you have in 15 this case, the opinions that you have in this case? 16 A. Yes. 17 Q. And again, so we're clear, because you might 18 have -- to be full disclosure, I think you were trying 19 to do, brought up a couple additional things here. 20 Are there any other opinions that you hold 21 relative to this case that are not contained within your 22 report or that we have discussed today, to the best of 23 your knowledge? 24 A. No. I think we've discussed them. 25 Q. Or they're in your report?

44 Page 44 1 A. Right. Correct. 2 MR. McCARTNEY: Okay. Then I don't have 3 any further questions for you. Thank you, Mr. Tosh. 4 MR. EADIE: I just have a couple 5 questions. 6 EXAMINATION 7 BY MR. EADIE: 8 Q. You were asked about factors like high staff 9 turnover or a high number of admissions and discharges 10 and their effect on staffing requirements at a facility. 11 How would high staff turnover or a high number 12 of admissions and discharges affect the staffing needs 13 of a facility? 14 A. I believe generally it would cause the 15 staffing needs to go up. 16 Q. So in terms of those factors versus the CMS 17 expected numbers, is CMS and, therefore, your analysis 18 basically giving the benefit of the doubt to the nursing 19 home that they have adequate training and an average 20 number of staff turnover and admissions and discharge 21 and things like that? 22 MR. McCARTNEY: Objection. Go ahead. 23 A. I believe that's a good assumption. 24 Q. (BY MR. EADIE) You were asked about your 25 expertise, and I think you touched on your college

45 1 degree and during the course of the deposition talked 2 about your work with analyzing these types of numbers. 3 Can someone just go on the publicly available 4 Web site somewhere and download the spreadsheets that 5 you have put together? 6 A. No. 7 Q. What type of experience did you require or 8 develop over the course of doing your work to go from 9 publicly available data to the analysis that you are 10 providing in this case? 11 A. Well, originally we used reports that were 12 obtained through Freedom of Information requests to CMS. 13 That would be the annual cost reports. We found out 14 very quickly that trying to use the hard copy of those 15 was very inefficient. 16 We later were able to develop a database that 17 now contains all of the annual cost reports for all the 18 facilities in the country. And then we wrote a program 19 that does the spreadsheets that we have now that 20 generate, I think, over 400 charts and graphs that look 21 at all the underlying information from the CMS cost 22 reports. Page Q. And are those charts and graphs things that 24 you developed in terms of developing expertise to 25 produce those over the course of the time that you've

46 Page 46 1 been doing this work? 2 A. Yes. That's correct. 3 Q. Have you given any -- have you done any 4 teaching or lectures or presentations on this subject 5 matter? 6 A. Yeah. Actually, I have traveled all over the 7 country giving lectures on this subject matter both to 8 small, you know, private groups, to State-sponsored 9 CLEs, and then also to national presentations both in 10 Webinar format and personal format. 11 Q. Have you developed experience and expertise 12 with regard to how CMS structures its data and what that 13 data means? 14 A. Yes. 15 Q. Was that an easy, one-day process, or did that 16 take some time? 17 A. Oh, no, no. That -- well, it's still 18 evolving. I mean, we are constantly looking at new 19 information that's available. It wasn't until last fall 20 that we actually found the staffing information that 21 we're now using to analyze staffing. 22 So it's constantly evolving. It's taken the 23 full five years that I've been working on it to get to 24 where we are today. 25 Q. How does CMS or what data does CMS rely on in

47 1 understanding the individual care needs and staffing 2 time to address those care needs in residents in a 3 nursing home like Kindred Stratford? 4 MR. McCARTNEY: Objection. 5 A. Kindred Stratford and all other nursing homes 6 do individual assessments of each resident at their 7 facility, and those assessments are called a minimum 8 data set, also just referred to as an MDS. That 9 takes -- you know, it tracks all their health issues, 10 how much assistance they need with transfers and 11 dressing and eating and all that kind of stuff. 12 At the very end of that MDS, it calculates a 13 score for that individual that basically, if you look at 14 a chart, tells you how much nursing care that individual 15 will need on a daily basis. 16 Q. (BY MR. EADIE) Is that the RUG score that you 17 guys were discussing? 18 A. That is -- that's called the RUG score. And 19 so when Kindred submits that MDS to CMS, CMS uses that 20 to then calculate their expected staffing levels, which, 21 in turn, is what we rely on to do our analysis. 22 Q. So is it fair to say that the Kindred 23 Stratford facility itself is doing the evaluations of 24 how much care its residents need? 25 A. That is correct. Page 47

48 1 Q. Were you able to determine, based on the 2 information you have, whether or not Kindred Stratford 3 was insufficiently staffed on June 3rd, 2013? 4 A. Yes. It was -- it was understaffed. 5 Q. And how, if at all, would having the 6 individual RUG score breakdown on June 3rd, 2013, affect 7 your analysis? 8 A. The analysis that I have done right now, I can 9 see exactly the amount of nursing care that was 10 available on an hours-per-patient-per-day basis. And 11 the information I have from CMS for their expected 12 staffing levels is on a quarterly basis. So comparing 13 the numbers that I have versus their quarterly basis, I 14 can see that they're understaffed. 15 The difference would be, if I have the 16 individual RUG scores for the residents that were in the 17 facility on June 3rd, 2013, is I could calculate exactly 18 what the expected staffing level would be on that day 19 versus relying on a quarterly number. 20 Q. And are those individual care need numbers, 21 numbers that a nursing home like Kindred Stratford has? 22 A. Yes. Yeah. They're required to file the 23 minimum data set on everybody in the facility at least 24 every 90 days, and there are some requirements to file 25 it more often than that. Page 48