Friday, December 30, 2022

Nursing Homes: Addressing the Worst Operator Behaviors under Existing Law

One of the major challenges today preventing the effective oversight of nursing facilities is the dramatic change in ownership and management practices since the Nursing Home Reform Law was enacted in 1987. Thirty-five years ago, most facilities were individually owned (“Mom and Pops”) or were not-for-profit, public facilities, owned by corporations, or owned by publicly traded multi-state chains. Today, ownership and management of nursing facilities are frequently shared by multiple individuals and entities – multiple limited liability companies, real estate investment trusts, private equity firms, and other private investors that often deliberately hide their connections to facilities.

The federal government has not promulgated new regulations to address the changing ownership/management structures of nursing homes, leaving facilities and their residents vulnerable to unscrupulous owners and operators. However, the federal government has both the authority and the responsibility to assure that public reimbursement is actually spent on resident care. The Nursing Home Reform Law (1987) explicitly identifies as the broad “duty and responsibility of the Secretary”

to assure that requirements which govern the provision of care in skilled nursing facilities under this subchapter, and the enforcement of such requirements, are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective and efficient use of public moneys. [emphasis added]

More can and should be done at the federal level. However, there is new evidence that, even under existing authority, states may be able to address some of the worst of the owners’ excesses.

In the last few weeks, the New York State Attorney General, through the Medicaid Fraud Control Unit, filed cases against three nursing facilities, alleging that the facilities diverted millions of dollars in Medicare and Medicaid reimbursement to excessive profits for the multiple owners, understaffed the facilities, and provided grossly inadequate care to residents, before and during the COVID-19 pandemic. If successful, these cases would address ownership of the three facilities and could potentially lead to the introduction of better and more comprehensive statutory authority to prevent the abuses alleged in the lawsuits.


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