Last month, the U.S. House of Representatives released an investigative report that chronicled the increased number of nursing home abuse violations resulting from, among other problems, understaffing and fraud.
The report, “Abuse of Residents is a Major Problem in U.S. Nursing Homes,” researched by the special investigations division of the committee on government reform and released July 30, said that between January 1999 and January 2001, more than 30% of the 5,283 nursing homes in the U.S. were cited for an abuse violation — physical, sexual or verbal — with the potential to cause harm. During the 1990s, Medicare spending increased an average of 30% per year.
Since 1996, the percentage of nursing homes cited for abuse violations has increased annually. Last year, the number of abuse violations more than doubled those reported in 1996.
In the last fiscal year, the Office of Health Regulation (OHR) at the Mississippi State Department of Health (MSDH), which oversees 183 nursing homes, representing 17,356 licensed and certificate of need-approved nursing home beds, 207 personal care homes with 4,942 beds and 43 hospice care facilities, received 669 complaints. All but 10 complaints involved nursing homes, said Ricky Boggan, OHR director.
“We inspect the homes annually,” Boggan said. “If there’s a problem, we schedule a follow-up inspection.”
An increase in abuse violations has led to a flurry of lawsuits filed against nursing homes. Since last April, record verdicts of $312 million and $82 million in Texas and $20 million in Florida have been awarded.
Tampa, Fla. -based Wilkes & McHugh, P.A., has about 1,000 cases pending. One of its principles, Jim Wilkes, is often referred to as the nursing home industry’s most hated man. Of the more than 1,500 lawsuits he’s filed against nursing homes since 1986, he’s only lost a handful of cases.
“It’s just amazing how awful the care is,” he said. “So if you’re able to present the facts, they either settle, or the jury goes against them.”
The firm won four of the biggest verdicts ever reached against Florida homes, including $15 million against Tampa’s Brian Center for allowing a Korean War veteran to die of starvation and $20 million against St. Petersburg’s Colonial Care Center for not feeding a man for a month and not treating his wounds. He developed gangrene.
“The concept of warehousing the elderly this way is an anathema of dignity, fairness and courtesy,” he said.
Shane Langston, president of the Mississippi Trial Lawyers Association (MTLA), said bedsores, overall neglect and malnutrition, respectively, are the most common complaints of poor care in nursing homes. “Too often, I handle cases where elderly patients, who don’t have the strength to move and must be rolled from side to side by the personnel at the nursing home to prevent bedsores, weren’t turned or monitored and got worse and died of gangrene. I handled one case, in Brookhaven, where an elderly patient was bitten by ants.”
MTLA endorsed the Vulnerable Adults Act and “that was an improvement,” Langston said.
Both sides agree that understaffing is a common problem in the nursing home industry, Langston said.
According to a recent congressional report, 92% of nursing homes in the U.S. are understaffed and 54% are dangerously understaffed.
“Most of the homes I’ve been involved with were private facilities that are going to collect their money either from families or Medicaid and Medicare,” Langston said. “They need to stop spending so much money on administrative salaries and management fees and start devoting more money to personnel.”
The worst offenders are for-profit chains, said Steven J. Vancore, spokesman for Wilkes & McHugh.
“Sometimes the understaffing is dangerously low,” he said. “We’re trying to get everyone to recognize the nursing home concept doesn’t work, certainly not as a primary means of long-term care.”
Vancore said other states, like Oregon, have found better alternatives to nursing home care.
“In Oregon, they stopped building nursing homes in 1990,” Vancore said. “Since that time, the over 65 population has increased 50%. Yet they have fewer beds and one of the lowest occupancy rates in America. They give families a voucher and tell them to find a service that they like and the government pays for it.
“When the family has more control over the selection process and holds the providers accountable, the care improves tremendously. Right now, most states pay the nursing homes, not the families and that’s the difference.”
In Mississippi, the primary funding source for nursing home patients is the Medicaid program, a division of the governor’s office. It is funded by appropriations made by the State Legislature and by matching funds from the federal government. The MSDH Division of Health Facilities Licensure and Certification certifies nursing homes for participation in the Medicaid and Medicare programs.
In the U.S., the nursing home industry exploded in the early 1990s, after the government recognized that per diem costs in nursing homes were substantially less than in hospitals. Publicly-traded corporations scooped up mom-and-pop operations and nonprofit homes and subsequently squeezed out the competition.
“Nursing homes had been billing the government under a system where they just sent a bill for each patient’s care,” Vancore said. “It worked well at first because it was an alternative to so many people being in the hospital at a cost of thousands of dollars a day for some patients. The new system was only costing the government $200 or $300 a day.”
According to a General Accounting Office report in 1995, alleged widespread fraud and chronic overbilling — sometimes double and triple the allotted amount — was discovered in the nursing home industry. Soon after the report was released, Congress allocated a flat fee based on per-patient costs, which was included in the Balanced Budget Act of 1997.
“Within 18 months, five of seven large publicly-traded corporations filed bankruptcy saying they had excessive debts and couldn’t handle the cuts,” Vancore said. “After that, two more GAO reports came out and said that despite the cuts, the new payments were ‘generous, adequate and in some cases excessive.’ Despite that, Congress increased payments twice more in 1999 and 2000. In fact, payments were increased $31 billion across the board over five years.”
Fraudulent billing is another common problem in the nursing home industry, particularly because most states, like Mississippi, don’t allow on-site bookkeeping audits, Vancore said.
“Do you know of any other industry that has limited entry into the market, a growing industry, guaranteed residents and guaranteed payments for service, even if you don’t provide the service you say you did? We have case after case where the homes admit they didn’t provide the service but they billed the government.”
Fort Smith, Ark.-based Beverly Enterprises, Inc., with 21 nursing facilities representing 2,598 beds in the state, is one of the largest providers in Mississippi. Until Beverly recently sold its 49 nursing homes in Florida, the nation’s largest nursing home operator had 534 nursing homes nationwide.
Last month, Beverly reported that second-quarter operating profits jumped 35% to $11.5 million over the same period last year. But the corporation warned it expects to pay a penalty later this year to settle government claims it was overpaid for services to Medicare patients from 1996 to 1998.
Higher Medicare payments contributed to the company’s rosy second-quarter outlook, with Beverly receiv
per day for Medicare patients compared to $267.70 for the same period in 2000. Nursing home occupancy of 86.3% remained virtually unchanged.
“Beverly is the poster child of what’s wrong with the nursing home industry,” Vancore said