South Carolina Nursing Home Blog : South Carolina Nursing Home Lawyer & Attorney : Poliakoff & Associates Law Firm : Elderly Care, Senior Care

The Wall St. Journal reported that "some of the nation’s largest health-care landlords are pulling back from nursing homes on concerns they will be less profitable in an era of steep Medicare and Medicaid cuts." Health Care REIT Inc., which leases to about 250 nursing homes nationwide, and Senior Housing Properties Trust, which is the landlord to nearly 50 nursing homes, have indicated they are greatly reducing their exposure or that they might exit the sector.

"Ventas Inc., one of the largest health-care landlords in the U.S., said it is comfortable with the approximately 300 nursing homes it already houses but won’t make major new acquisitions in the sector until there is more clarity on Medicare rates. Instead, Ventas plans to expand into assisted-living properties that aren’t dependent on government subsidies."

REIT equity investors remain attracted to nursing-home landlords, in part because of their relatively high dividend yields. Health Care REIT’s share price is up 22.6% so far this year and it pays a dividend yield of 4%, higher than the 3.3% yield for the overall REIT sector.

These entitlement programs combined make up about 90% of nursing-home revenue. If they are diminished, some nursing homes could have difficulty paying their rent.  Medicare pays for patients admitted for post-surgery rehabilitation for stays around 90 days or less. Medicaid, accounting for about 70% of most nursing-homes’ revenue, subsidizes longer stays for indigent elderly patients. The sequester will result in $11 billion in reduced revenue to Medicare providers. That is on top of an estimated $7 billion shortfall in Medicaid reimbursements nationwide last year, a 14.3% jump from 2011, according to the American Health Care Association.

Some nursing-home landlords say the market risk is overstated. If the sequester-induced cuts do occur, “We don’t believe it will have a big impact on the operators profitability,” said Craig Bernfield, chief executive and founder of Aviv REIT Inc., based in Chicago.

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Kaiser Health News reported that Medicare could earn up to $111 million annually if it limited insurers’ ability to retain investment earnings on the billions they are paid through the prescription drug program, according to a government report out.  Medicare prepays the private insurers approximately 20 days before the insurers pay their pharmacy bills and does not require them to return any of the interest they earn while holding that money, says the report by the Office of the Inspector General for the Department of Health and Human Services.

That contrasts with how the government treats insurers in the Federal Employees Benefit Program, which provides health coverage for federal workers, the report said. The auditors recommend that CMS pursue legislation to change the timing of payments so insurers pocket the money only briefly before they pay their bills. If the government had such a rule in effect in 2009 – the year the auditors studied – the Medicare Part D trust fund would have earned $111.2 million in interest.

The report  was given to the Centers for Medicare & Medicaid Services (CMS) and to members of Congress in hopes they would fix this loophole.

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DOJ announced a $12 million settlement with Hospice of Arizona along with American Hospice Management, LLC, and their parent corporation, American Hospice Management Holdings, LLC, for claims involving Medicare fraud and the False Claims Act.  The allegations involved submitting or causing the submission of claims to the Medicare program for ineligible hospice services provided by Hospice of Arizona.   The government alleges that Hospice of Arizona and its related entities engaged in certain practices that resulted in the submission of false claims, including pressuring staff to meet admissions and census targets, adopting procedures that delayed and discouraged discharges of ineligible patients, and failing to timely implement an adequate compliance program.
"The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from the symptoms, pain and stress of a serious illness) for a terminal illness, and have a life expectancy of six months or less if their disease runs its normal course. Today’s settlement resolves allegations that Hospice of Arizona and its related entities submitted or caused the submission of false Medicare claims between September 1, 2002 and December 31, 2010 for Hospice of Arizona patients that did not have a terminal prognosis of six months or less, or that did but were not eligible for the level of care billed."

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Fox News reported the charges against nurse Dale Kenyon for stealing pain medications from residents.  Investigators say Kenyon diverted pain medications intended for elderly dementia patients at the Mountain View Center nursing home where she worked.  Kenyon was arrested in January after administrators at the facility contacted the state Office of Professional Regulation to report the suspicion that Kenyon was stealing morphine checked out for patient use, according to court records.

Records for four patients at the facility showed that Kenyon had administered partial morphine doses to them on multiple occasions in December. In each entry, Kenyon administered 2 milligrams from a 10 milligram vial of morphine.  In accordance with the rules at the nursing home, she recorded that she “wasted” the remaining 8 milligrams of the drug — a process that requires another nurse to witness and sign off on the disposal of the excess morphine.   The alleged signatures were illegible and did not match anyone working at the time.

After initially denying that she took the drug, Kenyon allegedly admitted to forging the signatures and injecting the excess morphine into herself. Another registered nurse at Mountain View said he observed irregularities in Kenyon’s medication record-keeping in the past and had reported it to administrators. 

Ensuring proper use and disposal of powerful painkillers and narcotic drugs is a major consideration in every medical institution.

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The Medicare drug benefit is provided by private insurance companies, competing with one another and operating under contracts with the federal government. Each insurer has one or more committees that decide which drugs will be covered. The decisions are supposed to be based on scientific evidence.

However, the NY Times reported that a new report by Daniel R. Levinson, the inspector general at the Department of Health and Human Services, which admitted that the federal Medicare agency had not clearly defined “conflict of interest” and did not enforce standards meant to prevent such conflicts from influencing drug coverage decisions by the panels, known as pharmacy and therapeutics committees.

“The Centers for Medicare and Medicaid Services does not monitor conflicts of interest on pharmacy and therapeutics committees,” Mr. Levinson said. In many cases, he said, the government cannot identify potential conflicts because committee membership lists are unusable — incomplete, inaccurate and full of discrepancies. The panels are appointed by insurers or pharmaceutical benefit managers hired by insurance companies.

 A separate study by university researchers found similar problems in many state Medicaid programs. The study, published this month in the journal JAMA Internal Medicine, described “inadequate management of conflicts of interest” among the panels that recommend drugs for coverage under Medicaid.

Since Medicare officials do not monitor conflicts of interest, Mr. Levinson said, they cannot be sure that prescription drug plans are complying with federal requirements that at least two committee members — one practicing physician and one pharmacist — be “independent and free of conflict.”

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Slate's Matthew Yglesias wrote an interesting article titled American Doctors are Overpaid.

"The last time the OECD looked at this, they found that, adjusted for local purchasing power, America has the highest-paid general practitioners in the world. And our specialists make more than specialists in every other country except the Netherlands. What’s even more striking, as the Washington Post’s Sarah Kliff observed, these highly paid doctors don’t buy us more doctors’ visits. Canada has about 25 percent more doctors’ consultations per capita than we do, and the average rich country has 50 percent more. This doctor compensation gap is hardly the only issue in overpriced American health care—overpriced medical equipment, pharmaceuticals, prescription drugs, and administrative overhead are all problems—but it’s a huge deal."

He concludes "When it comes to the federal budget, Medicare is a problem. An uncapped commitment to finance the health care needs of elderly Americans is a big challenge for an aging country. But when it comes to the question of health care costs overall, Medicare is the solution. Its vast bargaining clout lets it get much better prices than any private insurer, and we should be relying on it more to pay our bills, not less."

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The Pittsburgh Post-Gazette reported that the sequester may cause Pennsylvania nursing and long-term care homes stand to lose about $37 million this year. The nursing home reductions are from a proposed 2 percent cut in Medicare funding, amounting to $11 billion this year alone affecting hospitals, primary care clinics and other specialty providers, but nursing homes receive Medicare funding, as well.

According to a 2012 analysis by Avalere Health and the Alliance for Quality Nursing Home Care, the sequestration-related Medicare cuts to skilled nursing facilities would total $782.5 million in year one, and $9 billion over 10 years, nationally.  In 2012, skilled nursing care facilities saw an 11.1 percent -- or $3.87 billion -- cut in Medicare funding. CMS said that was actually a "claw back," designed to combat unintended increases in therapy billing costs.

"On top of that, nursing homes could see other sequester-related reductions -- a possible 5.1 percent cut in housing funds for low-income seniors, and another 5.1 percent for Meals on Wheels funding. Both cuts originate from the estimated reduction in Older Americans Act funding, also contained in the sequestration package."

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Nursing homes nationwide that were not meeting even basic requirements to look after their residents charged taxpayers billions of dollars.  The Department of Health and Human Services’ inspector general said Medicare paid about $5.1 billion for patients to stay in skilled nursing facilities that failed to meet minimum quality of care rules in 2009, in some cases resulting in dangerous and neglectful conditions. One out of every three times patients wound up in nursing homes that year, they landed in facilities that failed to follow basic care requirements laid out by the federal agency that administers Medicare, investigators estimated. 

The government spends taxpayer money on facilities that actually endangers people’s health. In other cases, residents got therapy they didn’t need, which the report said was in the nursing homes’ financial interest because they would be reimbursed at a higher rate by Medicare. 

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Time Magazine had an interesting article explaining how and why health care bills are so expensive.  A for-profit system encourages waste, greed, and outlandish markups.  Executive compensation is ridiculous.  The article gives great details but here are some excerpts.

"Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock. When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?"

"The result is a uniquely American gold rush for those who provide everything from wonder drugs to canes to high-tech implants to CT scans to hospital bill-coding and collection services. In hundreds of small and midsize cities across the country — from Stamford, Conn., to Marlton, N.J., to Oklahoma City — the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to midlevel hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over $1 million."

"Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries."

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Recently Congress continued a little-known process that allows exceptions to what Medicare pays for physical, occupational and speech therapy. The Medicare limits before the exceptions are $1,900 for physical and speech therapy this year, and $1,900 for occupational therapy.  Medicare is prohibited from denying patients coverage for skilled nursing care, home health services or outpatient therapy because they had reached a “plateau,” and their conditions were not improving. That will allow people with Medicare who have chronic health problems and disabilities to get the therapy and other skilled care that they need for as long as they need it, if they meet other coverage criteria.

Nursing home residents will also get coverage for skilled care regardless of improvement, but does not change the duration, which is still limited to up to 100 days per “benefit period.” That begins when a patient is admitted as an inpatient to a hospital or a nursing home for skilled care and ends after 60 days without skilled care. The agreement preserves the requirement that they must also have spent at least three days as inpatients in a hospital.

Beneficiaries also often lose Medicare coverage for outpatient therapy because they hit the payment limit. But under the exceptions process Congress continued for another year, the health care provider can put an additional code on the claim that indicates further treatment above the $1,900 limit is medically necessary. When treatment costs reach $3,700, the provider can submit medical documentation to support a request for another exception to cover 20 more sessions. 

In 2011, nearly five million seniors received therapy services at a cost of $5.7 billion, and about one out of every four received an exception to the then-$1,870 limit, according to the Medicare Payment Advisory Commission, an independent government agency that advises Congress.

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