Pandemic shines spotlight on nursing home policy

Advocates for the industry are pushing Congress for more money and longer-term changes

House Ways and Means Chairman Richard E. Neal has a bill related to nursing home finances and private equity's involvement in health care. (Tom Williams/CQ Roll Call)
House Ways and Means Chairman Richard E. Neal has a bill related to nursing home finances and private equity's involvement in health care. (Tom Williams/CQ Roll Call)
Posted October 19, 2020 at 3:34pm

The devastating effects of the pandemic in nursing homes, where residents make up about 1 percent of the national population but 40 percent of COVID-19 deaths, is leading advocates to push Congress for more money and longer-term changes.

The American Health Care Association/National Center for Assisted Living, which lobbies for long-term care facilities, is pressing Congress to add another $100 billion to a $175 billion emergency provider fund created in a March law, with specific earmarks for long-term care.

The group also has asked for additional testing aid and priority on vaccine distribution. The Trump administration announced Friday that it plans to set aside vaccines for the industry, which CVS and Walgreens would deliver.

Nursing home groups also are calling on Congress to provide additional aid by further boosting the federal matching rate for Medicaid. Medicaid covers nearly two-thirds of nursing home patients, and many say pay rates are well below costs.

Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are negotiating another relief package. While the Democrats’ bill includes another $125 billion infusion for the emergency fund, the details of any potential deal are still in flux.

Other experts are seeking long-term changes, including moving away from large, crowded institutions and implementing more accountability for owners and investors. But the potential for federal action is undercut both by the trickiness of writing some changes into legislation and questions about funneling more money into programs like Medicaid after Congress spent trillions battling the pandemic.

“The big barrier there is money and will we have the political will to go down that path,” Harvard Medical School professor David Grabowski said of encouraging smaller, more patient-focused homes.

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Long before the coronavirus struck, some lawmakers sought to improve nursing home policies. The pandemic highlighted the dangers that come with placing elderly and medically frail patients in the care of workers who are often underpaid, undertrained or both.

Grabowski hails nursing home caregivers as the industry’s “true heroes.” When the coronavirus caught the world by surprise, many nursing home staff were on the front lines in the early months with little guidance or supplies to keep their residents alive.

The coming winter and rising case counts illustrate that “this virus is far from over,” AHCA/NCAL said in a statement. The group pointed to “systemic issues” like Medicaid funding and workforce shortages as areas that lawmakers should focus on.

“Properly funding the long term care sector would help us make investments in staffing, facility infrastructure, technology, and other necessary improvements,” the group said. “We need our nation to rally around our nursing homes and assisted living communities, like we have with our hospitals.”

Funding

Low pay, staffing shortages and pressures to boost profits mean many patients share rooms while employees often work at multiple facilities — which helped drive the spread in the country’s first known COVID-19 outbreak at the Life Care Center of Kirkland in Washington state.

Media reports have also exposed the practice of kicking out unprofitable Medicaid patients, as well as incentives for facilities to accept COVID-19 patients even if they are unequipped to treat or isolate them.

Medicaid paid an average of $203 per patient per day in 2019, while Medicare paid $487 per day and private insurance paid $247. Medicare pays for acute care, which is one reason the Medicare rate is higher, but it has been a target for change for years.

Any increase in Medicare or Medicaid funds could be partially earmarked for caregivers rather than for the companies themselves, Grabowski has said. Increasing caregivers’ pay is endorsed by the nonprofit industry association LeadingAge.

Accountability

Advocates for higher funding may face questions about nursing homes’ finances, especially those owned by a for-profit company. Profits from Medicare patients have averaged more than 10 percent for nursing homes in the past two decades, according to the Medicare Payment Advisory Commission.

Private equity’s involvement in health care has come under scrutiny, with House Democrats advancing a bill by Ways and Means Chairman Richard E. Neal, D-Mass., that would require disclosures from investment firms, while the Energy and Commerce Committee investigated private equity in health care last year.

Private capital also garnered interest from Republicans like Sen. Lamar Alexander, R-Tenn., and Rep. Greg Walden, R-Ore., in their bid to clamp down on surprise medical bills.

But questions remain. Corporations often erect legal firewalls by splitting operations into limited liability companies, for example. Owners can also self-deal through vendors in which they share financial stakes.

“We should probably do more oversight to get a sense of who’s telling the truth,” a Senate GOP aide said.

Mike Wasserman, past president of the California Association of Long Term Care Medicine and a vocal industry critic, says real estate is the main source of capital in the industry, and it’s often walled off from the medical management companies that run the nursing home’s daily operations.

“The nursing home industry is essentially about real estate,” he said.

Capital assets could be a good thing, he added, if they are used to improve care rather than profits. For example, companies could borrow money against their properties to address a failure for both the industry and the federal government: providing ample protective supplies to staff, especially during the pandemic. But many have not done so, Wasserman said.

“They could all in a heartbeat leverage their assets to provide an abundance of personal protective equipment for every nursing home in the country, and they have chosen not to do it,” he said.

Lawmakers could also consider ways to give more authority to clinical leaders, who are often overruled by financial and operations executives on daily decisions, said Wasserman. He left his job with a major nursing home chain in 2018 after he said management halted his initiative to include clinical staff in the hiring of new administrators.

Outlook

The urgency with which Congress and state governments will approach nursing home changes is difficult to predict in the midst of the current COVID-19 crisis.

But a pathway for legislation exists. Before the pandemic, the Senate Finance Committee was drafting a bipartisan bill targeting abuse and neglect. The bill included provisions aimed at restricting the use of psychotropic drugs, improving background checks, boosting training for surveyors and mining emergency room claims data for evidence of bad actors.

The bill could present a vehicle for more sweeping changes if momentum grows, since nursing homes have taken center stage during the pandemic. Both chambers are also working to reauthorize the Elder Justice Act, bipartisan provisions in the 2010 health care law that created nursing home transparency and accountability requirements.

Senate Finance Chairman Charles E. Grassley, R-Iowa, has held hearings on the topic with ranking member Ron Wyden, D-Ore., a former advocate for the elderly. Grassley’s reauthorization bill would funnel more assistance to nursing homes during the outbreak.

Congress has not enacted a significant overhaul of industry practices since a 1987 law established a patient’s bill of rights and mandated certain services.

“I think and hope there will be a comprehensive look at how the country is caring for the oldest people — people who are unable to care for themselves in nursing homes and assisted living facilities,” said Tricia Neuman, executive director of Medicare policy at the Kaiser Family Foundation. “The COVID crisis has been a huge and disturbing wake-up call that this is a vulnerable population. It has been more than 30 years since Congress has taken a look at nursing home safety standards, and it seems pretty clear that more could be done to protect patients.”