Congress, apparently still with time left over after all those hearings dissing the drug industry, is beginning to turn up the heat on nursing homes.
Today, the House Energy and Commerce subcommittee on oversight and investigations took its first swing at the target, with a hearing that focused on problems with regulation and full disclosure of [...]
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CMS is loath to do anything in regards to the inspections by surveyors at nursing homes.
It contracts out the oversight of each nursing home to each state’s health department. Numerous reports have shown how corrupt the oversight system is, especially during the Bush administration.
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, looking at self-reported not non-audited data, etc.
With the Carlye Group take-over of Manor Care, this just got worse.
Private for-profits do have a wider range of behaviors than public for profits. A private equity group can be more ruthless about profit than a public company.
Habana Health Care Center and fourty-eight other nursing homes in Florida were purchased in 2002 by a group of large private investment firms. Within months, the number of clinical registered nurses was half and budgets for nursing supplies, resident activities and other services also fell. The new investors and operators were soon earning millions of dollars a year from their new homes.
Residents of those homes fared less well. Over a dozen died from what their families contend was negligent care in lawsuits filed in court. Regulators repeatedly visited, finding malfunctioning fire doors, unhygienic kitchens, in other words, they created a hellhole.
These fourty-nine homes were some of the thousands of nursing homes across the nation that large Wall Street investment companies have bought in recent years. It includes prominent private equity firm Carlyle Group's buyout of Manor Care.
These types of private for-profits have acquired nursing homes, cut expenses and staff, sometimes below minimum legal requirements, increased profits, and quickly resold facilities for "significant" gains. But by regulatory benchmarks, residents at those nursing homes are worse off then they were under their previous public for-profit owners.
The Carlyle Group already restructured its operations which will comprise about 300 corporate entities that could obscure ownership and make it more difficult to regulate care. It would 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 to expand the business.
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.
How Much Do We Spend on Nursing Homes?
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
Nursing Home Transparency and Improvement Act of 2008
Summary of Major Provisions of the Act
Improve transparency and accountability in the ownership and operations of nursing homes
Corporations would be required to disclose their owners, operators, financers, and other related parties. Facilities that were part of chains would be required to submit annual audits. Purchasers would have to demonstrate that they were financially able to run facilities.
Require disclosure of how Medicare and Medicaid funds are spent
Providers would have to report wage and benefit expenditures for nursing staff on cost reports. Cost reports would be revised to categorize spending for direct care, such as nursing and therapies; indirect care, such as housekeeping and dietary services; capital costs, including buildings and land; and administrative costs, which often include the company’s profits.
Establish independent monitoring of chains
The federal government would develop a protocol for an independent monitor of chains to analyze their financial performance, management, expenditures, and nurse staffing levels. It would provide for corrective action and collection of civil monetary penalties.
Collect accurate information about nurse staffing
The government would collect data electronically from nursing homes on the number of RNs, LPNs, and nursing assistants, using payroll records and contracts with temporary agencies as the source. Data would include turnover and retention rates and hours of care per resident provided by each category of worker.
Provide better public information about nursing homes
Nursing Home Compare would be updated with more timely reporting of surveys; ownership information; accurate nurse staffing data, including turnover and retention rates; links to survey reports (Form 2567) when states put them online; enforcement actions; and all Special Focus Facilities identified for three years. The government would undertake a study on how to improve the website to make it more useful and understandable.
Implement new consumer complaint processes
The government would develop a standardized form consumers could use in filing complaints with the state regulatory agency or ombudsman. States would be required to establish a complaint resolution process for residents’ representatives who were retaliated against, including denied access to residents, if they complained about quality of care or other issues.
Provide for higher civil monetary penalties and other CMP reforms
Federal civil monetary penalties would be increased for the first time since the 1987 Nursing Home Reform Act – up to $100,000 in the case of a resident’s death. Fines would be held in escrow during appeals of deficiencies, no longer delayed until appeals were resolved. Federal CMP funds, which are now returned to the U.S. Treasury, are encouraged to be used for the benefit of residents.
Provide for reporting of closures and continuation of federal payments
Nursing homes would be required to give 60 days notice of closure, including a relocation plan and assurances that residents would be transferred to the most appropriate facility or other setting. No new residents could be admitted after the notice was given, and the federal government could continue Medicare and Medicaid funding for residents until relocation was completed.
Authorize studies of temporary management; special focus facilities; culture change; and nurse aide training
The bill provides for studies of temporary management; the characteristics of Special Focus Facilities, including ownership; best practices in culture change; and training of nurse aides and supervisors. Dementia management would be added to the initial 75-hour nurse aide.
What do sewer sludge and nursing homes have in common?
Washington, DC-based Carlyle Group owns Synagro Technologies, the company that processes municipal waste products, transports the resulting "sewer sludge" and distributes it for land application. Residents from around Pennsylvania have been calling for the expanded testing of Synagro sewer sludge and public reporting on its toxicity and disposal. Communities don't know everything that is in the sludge dumped on nearby lands. Without more information, there are possible health effects and diminished quality-of-life issues.
Concerns about the safety of Synagro sludge have intensified since the company's April 2007 buyout by The Carlyle Group. By taking Synagro private in a leveraged buyout last year, Carlyle is able to avoid requirements that Synagro provide federal agencies with certain information about its business practices and avoid publicly disclosing the existence of regulatory inquiries or legal complaints against the company resulting from health hazards caused by Synagro products and product distribution.
This has been happening with The Carlyle Group's take-over of Manor Care nursing homes earlier this year. Manor Care's restructure could obscure ownership and make it more difficult to regulate care. You can't see how they are wasting money, short-staffing, under-paying workers, or understand all the intricate inter-relations they have with supposedly outsourced services such as therapy.
All 46 Manor Care nursing homes in Pennsylvania staff below a standard recommend in a Centers for Medicare and Medicaid Services (CMS) study as putting residents at risk (Schnelle, et all. Appropriatness of Minimum Nurse Staffing Ratios in Nursing Homes: Phase II final report, December 2001).
The steady cash flows nursing home operators produce is a big attraction for private-equity firms that need the cash to pay down borrowed debt. Beverly, Extendicare, Genesis and Vencor/Kindred went private, and now Manor Care. Private firms keep all their dirty deeds from the public, especially consumers.
Ownership structures with multiple stakeholders have been used by other private-equity firms to minimize liabilities and shield them from regulator inquiries. They use these kinds of structures to avoid taking responsibility when taking control of businesses. Private-equity buyout firms such as the Carlyle Group are not required to publicly disclose information about the business practices of the companies they own.
The Carlyle Group, one of the world's largest private-equity funds with more than $75 billion under management, owns Manor Care, the largest nursing home chain, and Synagro, the largest sludge company in the United States. Perhaps they'll process all their municipal waste products, and distribute it to the lawns and gardens of all their nursing homes and add to the significant health complaints at the homes?
Legislate Federal Mandatory Staffing Levels
Many states fought twenty world-wars to get mandatory staffing levels, even then, it was constantly being attacked. In one state, when there was a possibility of cutting Medicaid funding, the industry jumped at the chance to use that funding cut as an excuse to abandon the staffing level requirements.
Federal law only requires nursing homes to provide sufficient staff and services to attain or maintain the highest possible level of physical, mental, and psychosocial well-being of each resident, and we know this is insufficient.
There have been numerous federal bills requiring various mandatory staffing levels, only to be defeated or die on the vine. Now is the time for those mandatory staffing levels!
While the Nursing Home Transparency and Improvement Act of 2008, passed under the umbrella of the recent Medicare bill, proposed collecting accurate information about nurse staffing by comparing it with payroll records, mandatory staffing levels wasn't in the nursing home bill.
Write or call your federal congressional delegation to be on the ground floor at getting this much needed legislation passed.
Carlyle's Public Dilemma with Manor Care
Everyone knows Carlyle Group eventually wants to go public, but it may have an added hurdle. Karen H. Bechtel, a Carlyle Group managing director who heads its health-care practice, and a veteran in the health-care investing field (Morgan Stanley), says "Carlyle is likely to hold on to Manor Care for at least five years."
Steven R. Howard, a New York lawyer who specializes in private equity says "if the company performs well, you sell it to the guys in Dubai, who will pay a fortune for it."
One of Blackstone and KKR’s major arguments was that they needed public currency to better expand their asset management platform beyond private equity (hedge funds, etc.). Blackstone and KKR both bought-out major nursing homes. Carlyle would likely make that case also, but investors may be a bit concerned about such expansion into public securities given the collapse of Carlyle Capital and pending liquidation of Blue Wave.
In other words: Carlyle has already demonstrated difficulty in straying from its private knitting, but would be asking for new capital to do that very thing. Could be tough for public investors to swallow.
This certainly isn’t to say that Carlyle couldn’t make a persuasive case, and would certainly argue that their problems were more a cause of timing that competence. Moreover, the firm would claim that its private securities knitting has been regularly marked with public security stitches, so such expansion isn’t actually that much of a stretch.
But it’s a case Carlyle will have to make. Blackstone didn’t have to because it didn’t have the blowups, and KKR didn’t have to because it’s not actually selling any new shares. If only Carlyle Capital still existed, so that Carlyle could just go public without anyone of import asking questions.
"The possibility of Carlyle Group following in the footsteps of rivals Blackstone and KKR in going public could face some challenges, according to Private Equity HUB. Carlyle could be stymied by the collapse of its mortgage-backed security investors Carlyle Capital and the upcoming liquidation of its Blue Wave hedge fund, writes Private Equity Hub."
This is a step we expect at some point with other nursing home chains that privatized in the last several years. It's a cycle: begins as a public company; they save up, sell out as private company (obscenely enriching the top dogs in the process); they suck all the assets dry; then they put it back into the public market. However, it's usually years before that happens, though, unlike Carlyle's apparent quick consideration of this move because of their bad investments.
On Friday, September 26, 2008, Reps. Pete Stark and Jan Schakowsky introduced the "Nursing Home Transparency and Quality of Care Improvement Act of 2008."
The bill increases the transparency of nursing home ownership, ensures that residents and their families have information about the quality of care at these facilities, and strengthens enforcement of nursing home compliance with quality of care standards. It is a companion to S. 2641, introduced by Senators Charles Grassley and Herb Kohl.
The Nursing Home Transparency and Quality of Care Improvement Act enables nursing home residents and government regulators to better know who actually owns the nursing home and who controls the decision-making that impacts the quality of care provided. In addition, the bill improves the reporting of information on staffing levels and direct patient care expenditures.
In addition to increasing transparency, the bill takes additional steps to improve the quality of care. The bill puts patients first, by requiring advance notice of home closures, standardizing the nursing home complaint process, and establishing specific processes and consumer protections for complaint resolution.
The bill also improves staff training to include dementia management and abuse training as part of pre-employment training. The bill improves accountability and enforcement by mandating that homes establish compulsory ethics and compliance programs, making civil monetary penalties more meaningful, and studying the feasibility of new independent monitoring requirements.
While the bill proposes collecting accurate information about nurse staffing by comparing it with payroll records, mandatory staffing levels is not in the nursing home bill.
Many states fought twenty world-wars to get mandatory staffing levels, even then, it was constantly being attacked. In one state, when there was a possibility of cutting Medicaid funding, the industry jumped at the chance to use that funding cut as an excuse to abandon the staffing level requirements.
Federal law only requires nursing homes to provide sufficient staff and services to attain or maintain the highest possible level of physical, mental, and psychosocial well-being of each resident, and we know this is insufficient.
There have been numerous federal bills requiring various mandatory staffing levels, only to be defeated or die on the vine. Now is the time for those mandatory staffing levels!
Write or call your federal congressional delegation to be on the ground floor at getting this much needed legislation passed.
The Bush Administration's Easing the Reins on Nursing Homes
According to government documents back in 2001, the Bush administration, through Thomas A. Scully, then administrator of CMS, wanted to ease regulatory requirements on nursing homes, reducing the frequency of inspections and lessening or eliminating some penalties (meaning deregulation).
The administration wanted to move away from adversarial enforcement toward a more collaborative one, in which regulators would work with nursing homes to improve care. You can see where that got us in the present market meltdown and economic crisis.
Senator Charles E. Grassley, long-time advocate of nursing home patients, has said it was risky to reduce the frequency of nursing home inspections. Today's good nursing home can become tommorrow's poor performing facility, if there is a change in ownship, a new administrator, a new director of nursing or an influx of patients with more severe illnesses.
One of those administration's goals was to devise new measures of the quality of care by using data reported by nursing homes. Surveyors look at self-reported and unaudited data, data reported by the facilities themselves and unverified by any oversight agency to ensure it is even true. This leads nursing staff to do charting by rote, instead of charting care that they're actually giving.
Government reports have said that nursing homes with a low ratio of employees to patients were significantly more likely to have quality-of-care problems. This administration did not want to set mandatory staffing ratios for the industry. Without sufficient staffing levels, patients don't receive even basic humane care, which translates into even more taxpayer dollars down the drain.
One example of this lack of quality care is when nursing homes put LPNs in charge of floors. Nursing home would rarely pay RNs their salary to run the floor. LPNs do not receive training in nursing school on how to be a charge nurse. RNs have at least three months of training in leadership on a floor. Therefore, nursing homes are being run by untrained staff, as well as lack of CNA staff.
That is why RNs are hired to make sure the paperwork is perfect before the so-called, unnannounced survey inspections. Nuring homes would improve greatly if all charge nurses were RNs. With no disrespect to all the fine LPNs, they are not formally trained to do the job of an RN, yet they are placed in that role in nursing homes.
This nation needs to write or call their federal congressional delegation to get the "Nursing Home Transparency and Quality of Care Improvement Act of 2008" passed and implemented.
Taxpayers still reward bad nursing homes with millions in bonuses and CMS blessings
Nursing homes throughout the country are eligible for hundreds of millions of dollars in taxpayer-funded bonuses despite past violations of basic health-and-safety standards.
According to a Des Moines (Iowa) Register review of 81 bonus payment programs in 36 states, it shows that some homes are collecting quality-of-care bonuses approved by the same federal agency that considers them to be below-average caregivers (CMS).
More than 60 bonus programs exist to help nursing homes do what they are legally required to do, such as pay the minimum wage or install fire sprinklers for resident safety.
Of course, the total cost to taxpayers is unknown, according to the Centers for Medicare and Medicaid Services (CMS), which approves and helps fund each of the bonus-payment programs now in effect but does not track any of those payments.
The Register examined eight bonus programs in the seven states where recent regulatory violations don't disqualify a home from receiving a bonus that is touted as being directly related to quality care. Those eight programs are costing taxpayers $312 million per year.
Toby Edelman, nonprofit Center for Medicaid Advocacy, thinks the government seems to be saying, yes, we're going to impose fines for poor care, but at the same time we're going to be giving you bonuses. It just doesn't make any sense.
Mary Kahn, a spokeswoman for CMS, said the law does not require, and thus the agency cannot require, that Medicaid-funded bonuses be linked to quality of care. The head of CMS, Kerry Weems, wrote in a recent letter to Iowa Sen. Charles Grassley that fines and sanctions for substandard care typically have no bearing on the bonus programs in various states.
Weems pointed out that CMS is proposing a pay-for-performance plan that would tie some federal grants to a care facility's compliance with minimum standards of care. But that plan has yet to be approved.
The bonus programs didn't attract much attention until March of this year when the Register reported that Iowa's program was providing bonuses to some of the worst homes in the state. This got Senator Grassley to write to CMS that he found the newspaper's report very disturbing. He asked them for information on other bonus programs throughout the nation.
This kind of system was devised FOR the industry, BY the industry, with the incestuous blessings of totally-corrupted, oversightless agencies and tolerated by powerful politicians with NO spine, NO ethics.
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