Last
week, the Center for Medicare Advocacy (Center) issued a Report about New York
State nursing facilities and their trade associations that sued their State to
prevent implementation of a new State law requiring them to spend 70% of their
revenues on care (including 40% on “resident-facing staff”) and limiting their
profits to 5%. Effective January 2022, the new law requires facilities to
remit to the State any “excess revenue” not meeting these accountability
measures. The facilities argue in their lawsuit that if these two
provisions in the 2021-22 State budget law had been implemented in 2019, they
would have been required to remit $824 million to the State.[1]
The
Center reported that the plaintiff nursing facilities include one of three
Special Focus Facilities (SFF)[2]
in New York State, five of New York’s 15 candidates for the SFF Program, and
seven of 11 facilities sued by the U.S. Attorney for the Southern District of
New York in June 2021 for allegedly fraudulently billing Medicare for
unnecessary services, in violation of the federal False Claims Act. This Alert discusses the $19,529,428 in
Provider Relief Funds received by the 13 plaintiff facilities.
Provider Relief Funds
During
the coronavirus pandemic, the Department of Health and Human Services (HHS) has
provided billions of dollars to health care providers that providers are not
required to repay.[3]
The Center reported in March 2021 that the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, enacted in March 2020, has been distributed to
providers in multiple phases.[4]
Although the CARES Act requires facilities to spend money awarded under the
Provider Relief Fund (PRF) on “health care related expenses or lost revenues
that are attributable to coronavirus,”[5] then-CMS
Administrator Seema Verma said, as she announced the initial payout of $1.5
billion to skilled nursing facilities in April 2020, that the federal money
comes with “‘no strings attached.’”[6]
In phase one, all certified skilled nursing facilities (SNFs) with six or more
certified beds were eligible to receive $50,000 per facility plus $2,500 per
bed.[7] More than
13,000 certified SNFs received a total of $4.9 billion. The Washington Post estimated
in August 2020 that “the average distribution was $315,000, with some larger
facilities receiving $3 million or more.”[8] Later payments to nursing facilities
from PRF in Phase 3 were based on “performance-based incentive payments.”[9] However,
multiple newspapers documented that facilities that were cited with, and fined
for, infection control deficiencies received “performance-based incentive payments”
and that that these payments often exceeded their fines.[10] Additional funding of $25.5 billion
under Phase 4 was announced in September 2021.[11]
As
described below, the 13
facilities discussed by the Center last week received PRF funding totaling
$19,529,428. The average PRF payment for each of the 13
facilities is $1,502,264, with a range of $545,135 to $2,511,679. The
Center identified these PRF payments from federal data.[12]
Provider Relief Funds Received by Plaintiff Nursing Facilities
Special Focus Facility and Candidates
The
one SFF, Pontiac Care and Rehabilitation (reported in the CDC dataset as
Pontiac Nursing Home) received $545,135 in PRF.
Plaintiff
Facilities that Are SFF Candidates (as of Dec. 8, 2021) and Provider Relief
Funds
|
Licensee Name
(According to the Complaint) |
Paragraph in Complaint |
Name in CDC Dataset |
Provider Relief Funds |
|
Buffalo Center for
Rehabilitation and Nursing |
48 |
Delaware Operations
Associates, LLC |
$1,851,138 |
|
FoltsBrook Center for
Rehabilitation and Nursing |
225 |
FoltsCare, LLC |
$ 990,051 |
|
The Grand
Rehabilitation and Nursing at Guilderland |
129 |
Guilderland Operator,
LLC |
$ 963,807 |
|
The Grand
Rehabilitation and Nursing at Barnwell |
133 |
Barnwell Operations
Associates, LLC |
$ 1,978,837 |
|
Wesley Gardens |
214 |
Wesley Gardens Corp. |
$ 1,211,976 |
Facilities Sued by the U.S. Attorney
Plaintiff
Facilities, Sued by the U.S. Attorney, Southern District of New York,
in June 2021 for Allegedly
Overbilling the Medicare Program, and Provider Relief Funds
|
Licensee Name
(According to the Complaint) |
Paragraph in Complaint |
Name in CDC Dataset |
Provider Relief Funds |
|
Excel at Woodbury |
189 |
Same |
$ 1,643,537 |
|
Long Island Care
Center |
107 |
Same |
$ 1,663,423 |
|
North Westchester
Restorative Therapy & Nursing |
253 |
Treetops
Rehabilitation and Care Center |
$ 1,498,294 |
|
Sutton Park Center for
Nursing & Rehabilitation |
142 |
Same |
$ 1,304,938 |
|
Suffolk Restorative
Therapy |
98 |
Same |
$ 2,511,679 |
|
Oasis Rehabilitation
and Nursing |
121 |
Same |
$ 1,707,001 |
|
Surge Rehabilitation
&Nursing |
195 |
Same |
$ 1,659,612 |
Discussion and Conclusion
Although
there has been little accountability to date for the COVID-19 relief money that
SNFs and other providers have received, HHS is authorized to audit providers
that received PRF “to ensure that program requirements are met.”[13] HHS has hired
multiple outside contractors, including KPMG and PricewaterhouseCoopers, to
conduct audits.[14] The
HHS Office of Inspector General (OIG) announced that the Office of Audit Services
would conduct audits of providers that applied for General Distribution under
Phases 1-3.[15]
In
December 2021, OIG announced that, as part of six case studies organized by the
Pandemic Response Accountability Committee, it will “identify how nursing homes
used the [COVID-19 Provider Relief] funds to support their COVID-19 response,
improve infection control practices, and assess selected outcomes from that use
of funds.”[16] OIG
anticipates releasing the report, “COVID-19 Pandemic Relief Funding and Its
Effect on Nursing Homes: Case Study,” OEI-066-22-00040, in 2023.
The
13 New York SNFs that are SFF candidates or were sued by the U.S. Attorney in
June 2021 for allegedly overbilling Medicare received $19,529,428 in Provider
Relief Funds. How did they spend the federal funds?
___________________
[1] “How Do Nursing
Homes Spend the Reimbursement They Receive for Care?” (CMA Report, Jan. 26,
2022), https://medicareadvocacy.org/how-nursing-homes-spend-public-money/
[2] The Centers for Medicare & Medicaid Services (CMS) updated
the Special Focus Facility lists on January 26, 2022. The facilities
identified in the Center’s January 26 Report, based on CMS’s December 8, 2021 lists,
remain on the lists.
[3] CDC. HHS
Provider Relief Fund, https://data.cdc.gov/Administrative/HHS-Provider-Relief-Fund/kh8y-3es6
[4] Center for Medicare Advocacy, “Nursing Facilities Have Received
Billions of Dollars in Direct Financial and Non-Financial Support During
Coronavirus Pandemic” (Special Report, Mar. 17, 2021), https://medicareadvocacy.org/report-snf-financial-support-during-covid/
[5] CMS, Acceptance of Terms and Conditions, https://www.hhs.gov/sites/default/files/terms-and-conditions-skilled-nursing-facility-relief-fund.pdf
[6] Verma said, “There are no strings attached, so the health care
providers that are receiving these dollars can essentially spend that in any
way that they see fit.” Alex Spanko, “$1.5B Medicare Cash Influx to Skilled
Nursing Facilities Has Strings Attached – and Some May Not Keep It,” Skilled Nursing News (Apr.
13, 2020), https://skillednursingnews.com/2020/04/1-5b-medicare-cash-influx-to-skilled-nursing-facilities-has-strings-attached-and-some-may-not-keep-it/
[7] HHS, “HHS Announces Nearly $4.9 billion Distribution to Nursing
Facilities Impacted by COVID-19” (News Release, May 22, 2020), https://public3.pagefreezer.com/browse/HHS.gov/31-12-2020T08:51/https://www.hhs.gov/about/news/2020/05/22/hhs-announces-nearly-4.9-billion-distribution-to-nursing-facilities-impacted-by-covid19.html
[8] Debbie Cenziper, Joel Jacobs and Shawn Mulcahy, “Nursing home
companies accused of misusing federal money received hundreds of millions of
dollars in pandemic relief,” The
Washington Post (Aug. 4, 2020), https://www.washingtonpost.com/business/2020/08/04/nursing-home-companies-accused-misusing-federal-money-received-hundreds-millions-dollars-pandemic-relief/
[9] CMS, “Nursing Home Quality Incentive Program Methodology” (Dec.
7, 2020), https://www.hhs.gov/sites/default/files/nursing-home-qip-methodology.pdf
[10] See
Zack Newman and Kevin Vaughn, “117 Colorado nursing homes with COVID outbreaks
received both fines and financial assistance from the federal
government,” The Colorado
Sun (May 9, 2021), https://coloradosun.com/2021/05/09/colorado-nursing-home-fines-coronavirus/ and
“Michigan nursing homes rewarded thousands of dollars after not following COVID
protocols; Hundreds of nursing homes cited,” (May 25, 2021), https://www.clickondetroit.com/news/local/2021/05/24/michigan-nursing-homes-rewarded-thousands-of-dollars-after-not-following-covid-protocols/, discussed
in Center, “Nursing Homes Fined for Infection Control Should Not Receive
COVID-19 ‘Performance Based’ Relief Funds” (CMA Alert, May 27, 2021), https://medicareadvocacy.org/no-extra-funds-for-poor-performers/
[11] HHS, “HHS Announces the Availability of $25.5 Billion in COVID-19
Provider Funding” (Press Release, Sep. 10, 2021), https://www.hhs.gov/about/news/2021/09/10/hhs-announces-the-availability-of-25-point-5-billion-in-covid-19-provider-funding.html
[12] On January 25, 2022, the Department of Health and Human Services
(HHS) announced the distribution of an additional two billion dollars from the
PRF. HHS, “HHS Distributing $2 Billion More in Provider Relief Fund
Payments to Health Care Providers Impacted by the COVID-19 Pandemic” (Press
Release, Jan. 25, 2022), https://www.hhs.gov/about/news/2022/01/25/hhs-distributing-2-billion-more-provider-relief-fund-payments-health-care-providers-impacted-covid-19-pandemic.html. The
HHS Press Release includes a link to a dataset from the Centers for Disease
Control and Prevention that identifies every provider in the country that has
received PRF funds. https://data.cdc.gov/Administrative/HHS-Provider-Relief-Fund/kh8y-3es6.
[13] Health Resources & Services Administration, “Provider Relief
Fund General Information,” https://www.hrsa.gov/provider-relief/faq/general
[14] Wachler & Associates Health Law Blog, “HHS Expands Its
Capability to Audit the Provider Relief Fund” (Sep. 1, 2021), https://www.wachlerblog.com/hhs-expands-it-capability-to-audit-the-provider-relief-fund/. See also REDW, “Your Guide
to the Provider Relief Fund Single Audit Requirement” (Nov. 9, 2021), https://www.redw.com/blog/2021/11/09/your-guide-to-the-provider-relief-fund-single-audit-requirement/
[15] OIG, “Audit of CARES Act Provider Relief Funds – Payments to
Health Care Providers That Applied for General Distribution Under Phases 1, 2,
and 3,” https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000587.asp
[16] OIG, “COVID-19 Pandemic Relief Funding and Its Effects on Nursing
Homes: Case Study,” https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000634.asp
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