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

USA Today had a great article on the excessive number of nursing homes that receive taxpayer money but refuse to meet the minimum requirements for quality of care.  The requirements are basic and necessary services, and fundamental safety and food standards. Personal hygiene, responding to call bells, fresh foods, hot water, taking vital signs, etc----basic stuff but because of greed and short-staffing one in five of the nation's 15,700 nursing homes have consistently received poor ratings for overall quality.

More than a quarter-million patients live in homes given another set of low scores within the past year, according to data released today by Medicare, which first released the star ratings of the nation's nursing homes in late 2008. The ratings are derived from inspections, complaint investigations and other data collected mostly in 2008 and 2009.

USA TODAY found that all 50 states and the District of Columbia have homes with poor ratings from one year to the next.  And dozens of those facilities are the only nursing homes for miles.

Late in the Bush administration, the Centers for Medicare & Medicaid Services began assigning nursing homes one to five stars for quality, staffing and health inspections, as well as an overall score. Nearly all homes that repeatedly received few overall stars — one or two stars — were owned by for-profit corporations, the data show.

"The issue is the owners have to take responsibility for the consequences" of poorly performing homes, says Larry Minnix, CEO of American Association of Homes and Services for the Aging.

The newspaper's analysis found the lowest-rated homes had an average of 14 deficiencies per facility, which can include quality-of-life measures and safety violations.

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The Billings Gazette had an article proving that for-profit nursing homes provide less quality care than non-profit nursing homes.  A disproportionate number of Montana nursing homes rated below average by the government are operated by for-profit corporations, an analysis shows.   Almost 60 percent of the state’s skilled-nursing facilities awarded one or two stars by Medicare are for-profit entities, according to information available on the government’s Nursing Home Compare Web site.  For profits tend to cut corners and decrease staffing for profit and bonuses.

Medicare rates nursing homes on a five-star scale using data collected during annual inspections. Facilities are also scored on their staffing levels and how they perform on certain quality measures. Some 26 of Montana’s 90 nursing homes earned one or two stars in the most recent analysis. One star is “much below average” and two stars is “below average,” according to Medicare. 

“I don’t think it means a lot,” said Jerry Smyle, vice president of operations for Lantis Enterprises Inc., which owns 12 for-profit nursing homes in Montana.

Of course, he doesn't.

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Oregonlive had an article about SunWest's recent sale of nursing homes.  Sunwest Management has signed a deal to sell 134 of its senior housing facilities to a group led by private equity giant Blackstone for $1.15 billion in cash and assumed debt.  The price is lower than the approximately $1.27 billion price tag discussed last September when the deal first came to light.  Blackstone Real Estate Advisors VI LP is leading the acquisition group. Teaming with Blackstone are Seattle-based Emeritus Senior Living and Columbia Pacific Advisors, an entity controlled by Dan Baty, chairman and co-CEO of Emeritus.   Baty went to considerable lengths to win a seat at the negotiating table. His company, Columbia Pacific, bought up $290 million in debt that various Sunwest entities owed to lenders and shrewdly attempted to use its new position as a creditor to leverage a better deal out of Sunwest.

Sunwest was once the fourth-largest assisted living company in the country. It fell into disarray in 2008, a victim of the credit crisis, its own out-of-control growth, greed, mismangement, and poor quality of care. The company's crash led to one of the largest investment scandals in Oregon to come out of the economic downturn. In the summer of 2008, Sunwest affiliate companies stopped making promised interest payments on the more than $400 million it owed to some 1,200 investors.

The U.S. Securities and Exchange Commission sued Sunwest and its former CEO, Jon Harder, in March, accusing the company of running a Ponzi-like scheme. Like nearly everything about Sunwest, the proposed sale to Blackstone is controversial. Some investors feel that Blackstone is offering a lowball price. The bid must be approved by U.S. District Judge Michael Hogan, who has been overseeing a complex legal mediation involving Sunwest, its investors and lenders since early this year.

If the Blackstone/Emeritus group does not prevail, it could be entitled to $13 million in breakup fees and expense reimbursement, according to court documents outlining the tentative deal.

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Palm Beach Post ran an interesting article about possible Medicaid Fraud.  As taxpayers, we should all be outraged when nursing homes take money for patient care and use it for other reasons such as perks, bonuses, and profit.  Medicaid auditors have disallowed more than a half-million dollars in "operating costs" at a Pahokee nursing home.  The audit only looked at a limited period, 2003-2004, and concluded nearly $672,000 in operating expenses did not merit reimbursement by the government.  Hopefully, they will audit additional years to find the millions taken in Mediciad funds.  Government money provides most of the revenue at the 120-bed nursing home, where the annual operating budget runs between $5 million and $10 million.

Among the red flags: Billing the government for automobile expenses "not supported as business-related" at Glades Health Care Center.  The Post examined spending on hot tubs, Cadillacs, BMWs and other luxury cars, along with hefty pay for executives and their family members at Glades Health Care Center and related organizations over several years.

A spokeswoman for the state's Agency for Health Care Administration said she was not aware of other audits currently under way against the chain of nursing homes, though she could not rule out further inquiries.  Why aren't they doing audits for other years?

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St. Louis Today had an article about a criminal enterprise masquerading as a nursing home.  Luckily they got caught and the company pleaded guilty to fraud and will pay $1.6 million in fines and restitution.

When the Texas-based Cathedral Rock Corp. bought 11 Missouri and Illinois nursing homes in 2001, owner and CEO C. Kent Harrington told employees that residents were the first priority and would get "extra-special treatment."

The real priority was packing elderly and disabled clients into those homes — including five in the St. Louis area that were understaffed and provided substandard care, according to court documents and federal prosecutors.   Until 2005, the services "were grossly inadequate" and represented "a complete failure of care," Assistant U.S. Attorney Dorothy McMurtry said in court.

It also settled a whistle-blower civil lawsuit filed by nurses in 2003 that triggered what officials said was a relatively rare criminal prosecution of a nursing home over poor care.

Five Cathedral Rock-owned companies that ran those homes agreed to pay $1 million in criminal fines and penalties, and $628,000 in the civil settlement.  The companies will be formally sentenced in April, likely to some term of probation in addition to the fines and penalties.  So no one is going to jail for defrauding the government, stealing from medicare and medicaid, and directly causing the deaths of dozens of residents!

Among the claims was that the homes' staff doctored patient charts, falsified drug records and failed to give necessary medications. Some residents suffered from bed sores. Others wandered away. One ended up on a roof. One was found days later. One died after falling from a window.  The homes were repeatedly cited by regulators, fined and penalized.   Officials said the homes filed corrective plans but then failed to comply or "misrepresented" their efforts to comply.

"FTB (fill the beds) is everything," read a 2004 e-mail from a Cathedral Rock regional vice president to another executive. "Whereas compliance is important and cost control is as well, CENSUS is to be your primary focus," the e-mail read.

In 2004, Cathedral Rock had 2,600 beds in 25 nursing homes and assisted-living facilities in Missouri, Illinois, Texas, Ohio and South Carolina, Harrington said at the time.

Its website currently lists 1,308 beds in 15 homes in Texas and New Mexico. A spokesman said it no longer operates facilities in Missouri or Illinois.

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The Hartford Courant had an article about another greedy nursing home CEO. The former chief executive of a now defunct nursing home chain pleaded guilty to federal charges that he improperly used money intended for the homes to buy real estate.   Raymond Termini pleaded guilty to conspiracy to commit wire fraud and engaging in unlawful monetary transaction.

Termini stole a $6 million loan for private business transactions, and up to $2 million for sprinklers at the nursing homes instead to buy real estate and other purposes.  Termini was CEO of Middletown-based Haven Healthcare, one of the state's largest nursing home chains before it filed for bankruptcy protection in 2007, operating 27 facilities in five states, including 15 in Connecticut.  Termini agreed to forfeit $500,000.  So he steals millions but he "agreed" to pay a measly half a million. 

"Mr. Termini admitted he made some errors," Keefe said. "Otherwise he did a lot of good for a lot of people in that industry."

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Anderson Independent Mail posted an article by Lee Bowman and Thomas Hargrove/Scripps Howard News Service about a statistical analysis of the federal government’s first-ever ratings of nearly 16,000 nursing homes.  The study revealed some comon sense conclusions including an uneven level of quality across the nation and shows how complicated it is to find a good nursing home.

The Scripps Howard analysis of the Centers for Medicare and Medicaid Services’ Nursing Home Compare system shows that:

In Institutions run by for-profit corporations, which account for about two-thirds of all nursing homes, generally get lower scores than those run by nonprofits groups.

Homes with more nursing staff per patient, which also tend to be run by nonprofit groups, generally do better in the ratings.

Homes with more than 100 beds tend to get lower scores in all categories, including health of residents and levels of nursing care.

Ratings are lowest in Southern states, particularly for nursing care and registered-nurse staffing, and highest for homes in the Northeast.

Slightly more than 20 percent of nursing homes nationwide have been regularly given the lowest ratings, and 12 percent to 13 percent have received the top rating.   

While more than 500,000 Americans die in nursing homes each year, more than 2 million return home after a nursing-home stay of less than three months.

CMS collects data on all nursing homes that care for Medicare or Medicaid patients and displays the information at www.medicare.gov/NHCompare. The system, implemented late last year, includes everything from fire safety and food preparation to rates of residents suffering from bedsores.  Even CMS officials agree that while the same criteria are used for the inspections, the focus and depth of the assessments may be different from state to state, so the ratings of different facilities should not be compared across state lines.

The rating system is on a scale from one star to five stars. Five stars indicate that a nursing home ranks “much above average,” four stars are “above average,” three are “about average,” two are “below average” and one is “much below average.” Rankings are updated every three months, and some data are revamped monthly.

There are about 15,700 nursing facilities listed on Nursing Home Compare.

Health-care advocates say data on nursing-staff levels — self-reported by home administrators and including time spent on administrative chores as well as actual patient care — don’t give a clear picture of the care being provided.

“Even though we’re skeptical about some of the information, it’s the best starting point available for research,’' she said. “But people need to understand that the stars may not reflect what they’ll find inside a facility.   “Unfortunately, for many families, they’re lucky if they get 24 or 48 hours before a (hospital) discharge to make a decision. That’s not enough time to do much homework, but at least the ratings and the other information on the site might help you rule some facilities out.”
 

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 Long-Term Living posted an interview online on Dec. 3, 2009 with a former administrator who has written a book about his career as an administrator in Maryland nursing homes.  Elliott D. Cahan, a retired administrator, gives in his book, A Place Like Home, candid reflections on running facilities for for-profit and not-for-profit operators in Maryland.  Below are just a few of the excerpts from the interview where he admits that corporate control of the budget, concern about proftis, and quality of staff cause problems in trying to run a nursing home.   Cahan elaborated on all of these points in an interview with Richard L. Peck, former Long-Term Living Editor-in-Chief.

Peck: Your comments in your book, though, present quite a mixed picture—principally, that the administrator’s job is a juggling act. Would you elaborate?

Cahan: All the disparate parties involved in resident care—residents, families, staff, regulators, owners—come at it from different angles, but ultimately, it’s the administrator who is holding the bag for providing the care. Put it another way, it’s like a stack of cards and you’re never quite sure which card is holding up the stack—take away the DON, the nursing assistant, the RN, and will the whole thing collapse? It’s a precarious business. And yet I always found it interesting that Maryland had no requirement for a state surveyor to have worked in a long-term care facility. It’s a job that is more difficult than many people think.

Peck: Would you say that an administrator’s principal focus would be on staff?

Cahan: I think a principal role for the administrator is to clear the way of all red tape and roadblocks so that staff will have an environment for success. If you do this, they will provide good care. You can’t pay the highest wages, although they should be competitive, but basically if you provide an environment where staff feel appreciated and want to show up every day, good care will result. Specifically, that means giving them the supplies, the equipment, including maintenance and repair, and in general eliminating frustration from their daily work.

Peck: By the same token, what do administrators need?

Cahan: They need to be empowered by the owner, the board, and the corporate office. They need more than “sometimes” authority—for example, having no control of the budget but being held accountable for spending nine bucks for doughnuts at a staff meeting.

Peck: Among the more controversial statements you make in your book is that, from a quality standpoint, not-for-profit facilities are preferable to for-profit facilities. Would you discuss that?

Cahan: That probably is the most controversial statement in my book. But I can only go by personal experience. I’ve heard for-profit management of one chain admit that it was all about the quarterly share price, not the residents. At least they were honest. In general, the for-profit chains thought that they would create efficiencies through centralization but it never happened. Also, they went through a period when they bought provider companies at crazy prices, with huge mortgages that operations could never support. It made me wonder whether investors really understood the field, but this had a bearing on quality. I’m not saying this is a hard-and-fast rule—there were for-profit facilities in inner city neighborhoods that offered much better environments than was available at home, and I’ve seen not-for-profits that provided low quality of care. I was just addressing the overall situation with that comment.

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I have seen two lists that discuss the highest paid jobs.  One list is based on the Bureau of Labor Statistics and the other is from Forbes Magazine.  Both are dominated by health care professionals and show that there is clearly no need for tort reform.

1. Anesthesiologists: $197,340. (And anesthesiologists make more money in the state of Washington than in any other U.S. state)

2. Surgeons: $206,150. (Highest-paying state: Wyoming.)

3. Obstetricians and gynecologists: $192,040. (Highest-paying state: New Hampshire.)

4. Orthodontists: $194,900. (Highest-paying state: Wisconsin).

5. Oral Surgeons: $190,760. (Again, the highest-paying state is Wisconsin.)

6. Internists: $176,860. (Highest-paying state: Louisiana.)

7. Prosthodontists: $169,940. (Highest-paying state: Virginia)

8. Psychiatrists: $154,990. (Highest-paying state: Idaho.)

9. General Practitioners: $161,850. (Highest-paying state: Kansas.)

10. Chief Executive Officers: $144,600. (Highest-paying state: New Jersey.)

11. Dentists: $154,950. (Highest-paying state: Maine)

12. Physicians/Surgeons: $169,220. (Highest-paying state: Utah.)

13. General Pediatricians: $153,440. (Highest-paying state: Louisiana.)

14. Pilots/Co-pilots/Flight Engineers: $140,380. (Highest-paying state: Illinois.)

15. Podiatrists: $125,500. (Highest-paying state: Oregon.)

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Center for Medicare Advocacy issued a bulletin about overpayments to nursing homes.  The bulletin explains the long history of nursing homes collecting more money than they deserve or are entitled to for services especially for nonexistent rehabilitation.  Changes have recently been made to rein in wasteful spending and overpayments.

In March 2009, as in previous years, Medicare Payment Advisory Commission (MedPAC) recommended that Congress not increase Medicare nursing home rates.   MedPAC reported that "the aggregate Medicare margin for freestanding" nursing homes was 14.5% in 2007; that for the seventh consecutive year, the aggregate Medicare margins exceeded 10%; and a one quarter of SNFs show profit margins of at least 24.8%.   That is a big profit margin paid for by taxpayers.

How overpayments occur:

SNFs are paid for services they do not provide. PPS pays SNFs a daily rate based on the assessed needs of the resident.  Although getting paid based on the assessment, most residents were not provided the therapy they required in order to be placed into those assessment categories.  SNFs did not provide the amount of rehabilitation services they were paid to provide and rehabilitation services actually provided to residents under PPS decreased.  Now it will pay only for services that are actually provided in the SNF. Billions of dollars in overpayments have been wasted.  CMS is not recouping the billions of dollars of overpayments from the previous four years.
 

The falsity of "concurrent" therapy.  SNFs shifted from one-on-one therapy to "concurrent" therapy, a method by which one professional therapist works with multiple residents on different therapy tasks at the same time, but SNFs still bill Medicare as if each resident received 100% of the therapist's attention. For example, SNF Medicare reimbursement rules have allowed a therapist treating four patients concurrently during the course of one hour to bill Medicare for four full hours of therapy. CMS reports that more than a quarter (28.26%) of therapy provided in SNFs is now concurrent. CMS will close this loophole when it implements revisions to Medicare by requiring allocation of concurrent therapy time and by limiting concurrent therapy to two residents.  CMS is not recouping overpayments for the many past years of "concurrent therapy."

Greed.  When several large multi-state nursing home chains filed for bankruptcy protection in the late 1990s, Congress responded by increasing Medicare reimbursement rates for SNFs in multiple ways. Although Congress increased the nursing component of all SNF rates by 16.66%, SNFs did not spend the billion-dollar rate increase on nurse staffing, as Congress intended. The GAO found, "in the aggregate, SNFs' nurse staffing ratios changed little after the increase in the nursing component of the Medicare payment rate took effect. Overall, SNFs' average nursing time increased by 1.9 minutes per patient day."  The national for profit chains took the increase and put it in profits to increase their stock instead of using the money to increase staffing to provide proper and adequate care.

CMS has taken strong steps to eliminate some of the waste and overpayments to SNFs that have been well-documented by MedPAC and the GAO for many years. In the final regulations published in August, CMS eliminated the look-back period; recalibrated the rates to maintain budget neutrality; revised the rules for concurrent therapy; and is considering development of a SNF-specific wage index. These changes and the changes included in H.R. 3200 should not result in reduced staffing and quality of care, as suggested by the nursing home industry. Instead, they will improve the integrity of the Medicare program by ensuring that SNFS are reimbursed accurately and fairly for the services they actually provide.

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