Senator Grassley Introduces Nursing Home Transparency and Improvement Act of 2008

On February 14, 2008, Senator Charles Grassley and Senator Herb Kohl introduced the Nursing Home Transparency and Improvement Act of 2008 (S.2641). According to a related Press Release, S.2641 aims to bring more transparency to consumers regarding nursing home quality, improve enforcement, and strengthen nursing home staff training requirements.

Among other things, S.2641 would reportedly require that "special focus facility" designations be placed on the Nursing Home Compare website. S.2641 would also require that CMS develop a standardized complaint form and require more uniform reporting of nursing staff levels so that comparisons can be made across nursing homes. S.2641 would also strengthen the available penalties. For instance, S.2641 would reportedly allow the Secretary to impose civil monetary penalties of up to $100,000 for a deficiency resulting in death, $3,000-$25,000 for deficiencies at the level of actual harm or immediate jeopardy, and not more than $3,000 for other deficiencies. Finally, S.2641 would attempt to improve staff training by including dementia management and abuse prevention training as part of pre-employment training.

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Congress is turning up the heat on nursing homes, or so it seems. The House Energy and Commerce subcommittee on oversight and investigations held a hearing that focused on problems with regulation and full disclosure of ownership.

Surprisingly, this subcommittee had not held an oversight hearing about nursing home care since 1977. This indicates a rather lackadaisical attitude on the part of Congress in regards to our senior population. The last significant change in nursing home regulations was the Nursing Home Reform Act of 1987.

Now it seems Congress maybe serious enough in examining whether standards continue to provide an appropriate level of care and protection for residents of nursing homes.

The subcommittee released a report commissioned by the Centers for Medicare and Medicaid (CMS) that suggested that the regulatory enforcement system for nursing homes has a lot of problems.

All 46 Manor Care nursing homes in Pennsylvania staff below a standard recommended in a Centers for Medicare and Medicaid Services (CMS) study as putting residents at risk.

CMS contracts out the oversight of each nursing home to each state's health department. Not only is the each state's health department the problem, CMS may be part of the problem too!

CMS uses stealth moves like putting out the word that surveyors shouldn't cite anything they don't absolutely have to, cutting or under-funding oversight budgets, and looking at self-reported and unaudited data (data reported by the facilities themselves and no oversight agency verifies audits to ensure that it is even true).

Nursing home inspections depend on the paperwork to verify the residents are getting good care. Manor Care pays nurses to make sure the paperwork is perfect, thereby ensuring a good inspection.

In the past few years, a wave of new owners and investors has begun purchasing nursing home chains. These private-equity firms are unregulated and new to the nursing home market.

Many worry that the top priority for these new owners will be profits, rather than providing the staffing and resources necessary to ensure top quality care for our loved ones.

Frequently, they use complex corporate structures, separating the nursing home real estate from the operating companies and putting multiple layers of limited liability partnerships between themselves and the day-to-day operations of the nursing home.

The Carlyle Group already planned to restructure its take-over of Manor Care, which will comprise about 300 corporate entities that could obscure ownership and make it more difficult to regulate care. It split the company's real estate holdings from the rest of the business so the properties could be used as collateral to raise funds in credit markets.

Ownership structures with multiple stakeholders have been used by other private-equity firms to minimize liabilities and shield them from regulator inquiries like when cutting staff is made to improve profit margins. They use these kinds of structures to avoid taking responsibility when taking control of nursing homes.

Private equity is buying up this industry and then hiding the assets, and when residents are dying from lack of proper care, there is little the courts or regulators can do, while they skim off the profits to line the pockets of investors or plow the money into separate ventures that have nothing to do with nursing home care.

CMS and the states lack the tools to keep up with the rapid changes in the industry, to know who actually owns the country's nursing homes and who should be held accountable for the residents in their care. There is a crisis in our nation's nursing homes. The residents there need help!
— Greg Pawelski
Congress is turning up the heat on nursing homes, or so it seems. The House Energy and Commerce subcommittee on oversight and investigations held a hearing that focused on problems with regulation and full disclosure of ownership.

Surprisingly, this subcommittee had not held an oversight hearing about nursing home care since 1977. This indicates a rather lackadaisical attitude on the part of Congress in regards to our senior population. The last significant change in nursing home regulations was the Nursing Home Reform Act of 1987.

Now it seems Congress maybe serious enough in examining whether standards continue to provide an appropriate level of care and protection for residents of nursing homes.

The subcommittee released a report commissioned by the Centers for Medicare and Medicaid (CMS) that suggested that the regulatory enforcement system for nursing homes has a lot of problems.

All 46 Manor Care nursing homes in Pennsylvania staff below a standard recommended in a Centers for Medicare and Medicaid Services (CMS) study as putting residents at risk.

CMS contracts out the oversight of each nursing home to each state's health department. Not only is the each state's health department the problem, CMS may be part of the problem too!

CMS uses stealth moves like putting out the word that surveyors shouldn't cite anything they don't absolutely have to, cutting or under-funding oversight budgets, and looking at self-reported and unaudited data (data reported by the facilities themselves and no oversight agency verifies audits to ensure that it is even true).

Nursing home inspections depend on the paperwork to verify the residents are getting good care. Manor Care pays nurses to make sure the paperwork is perfect, thereby ensuring a good inspection.

In the past few years, a wave of new owners and investors has begun purchasing nursing home chains. These private-equity firms are unregulated and new to the nursing home market.

Many worry that the top priority for these new owners will be profits, rather than providing the staffing and resources necessary to ensure top quality care for our loved ones.

Frequently, they use complex corporate structures, separating the nursing home real estate from the operating companies and putting multiple layers of limited liability partnerships between themselves and the day-to-day operations of the nursing home.

The Carlyle Group already planned to restructure its take-over of Manor Care, which will comprise about 300 corporate entities that could obscure ownership and make it more difficult to regulate care. It split the company's real estate holdings from the rest of the business so the properties could be used as collateral to raise funds in credit markets.

Ownership structures with multiple stakeholders have been used by other private-equity firms to minimize liabilities and shield them from regulator inquiries like when cutting staff is made to improve profit margins. They use these kinds of structures to avoid taking responsibility when taking control of nursing homes.

Private equity is buying up this industry and then hiding the assets, and when residents are dying from lack of proper care, there is little the courts or regulators can do, while they skim off the profits to line the pockets of investors or plow the money into separate ventures that have nothing to do with nursing home care.

CMS and the states lack the tools to keep up with the rapid changes in the industry, to know who actually owns the country's nursing homes and who should be held accountable for the residents in their care. There is a crisis in our nation's nursing homes. The residents there need help!
— Greg Pawelski
The nursing home sector accounts for roughly 6 percent, or $124.9 billion of the more than $2 trillion that we invest annually in healthcare. As always, the question is “Are we getting good value for our money?”

Given how vulnerable nursing home patients are, questions about quality deserve special attention. Maggie Mahar does the basics, how much do we spend on nursing homes?

http://www.healthbeatblog.org/2008/06/health-care-spe.html
— Greg Pawelski