Own or lease? This is a common question that senior facility operators have. Experts agree that there is no “one size fits all” answer to this question. What is right for one operator or facility may not be for another one. With so much at stake, how can an operator be sure that he is making the right decision for his facility?

Cambridge Realty Capital has created an informative and compelling video series, “Message from the Founders”, to answer some of these common questions, providing insights based on hands-on experience in the industry.

“Owning vs. Leasing in Senior Housing” specifically addresses the critical question, “Should I buy or should I lease?” and is available for viewing 24 hours per day on Cambridge Realty Capital’s YouTube Channel, “ePulseLive.”

Cambridge Realty Capital’s “Message from the Founders” page.

Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge today has three distinctive business units: FHA-insured HUD loans, conventional financing, and investments and acquisitions. The company is one of the nation’s leading nursing home, assisted living and healthcare debt and equity capital providers, with more than 500 closed transactions totaling more than $4.6 billion since the early 1990’s, when the firm began its specialization in providing senior housing capital.

The first comprehensive study into injury related or premature deaths of residents in nursing homes has found that more than 80 per cent are from falls.  The study, published in the Journal of the American Geriatrics Society, found that between 2000 and 2012 there were 1296 deaths in Victoria, and 89 per cent of those were from .

The study, led by Professor Joseph Ibrahim, from Monash University and the Victorian Institute of Forensic Medicine, also found that seven per cent of deaths were from choking, 1.3 per cent were suicides, 0.6 per cent were from complications in clinical care, and 0.5 per cent were by resident-resident assault.

“While the very reason for older people being in these facilities, such as physical frailty and the presence of dementia means that they are at greater risk of from external causes (injury), there has been, until now, no information about deaths in nursing homes that may be premature or preventable,” he said.

More information: “Nature and Extent of External-Cause Deaths of Nursing Home Residents in Victoria, Australia” DOI: 10.1111/jgs.13377

Forbes had an article on the rating system on Medicare’s website, Nursing Home Compare.  Medicare and Medicaid’s Nursing Home Compare five-star rating system gives consumers a head-start when searching for a facility. Medicare and Medicaid’s rating system includes information from 3 sources—state health inspections (which can vary widely in rigor), quality measures, and staffing levels—both self-reported by the facilities themselves.  Now, the Kaiser Family Foundation has taken a closer look at the ratings, and reached some interesting conclusions:

–In a system that rates facilities from 1-5 stars, about one-third have low 1 or 2 star ratings, while about 45 percent received 4 or 5 stars.
–Non-profits, which represent only about one-quarter of nursing facilities, generally get higher ratings than for-profits.
–Smaller facilities score higher than larger ones.
–Nursing homes affiliated with continuing care communities have higher overall ratings than those that are not.
–Facilities in states with large numbers of low-income older residents rate more poorly than those in states with fewer poor seniors. Note: This looks at state residents, not residents of individual facilities.
–There is a wide variation in quality among states. In 5 states, more than 20 percent of facilities received 1 star ratings. In 7 states, at least 30 percent received top scores.
–About two-thirds of US counties have at least one 4 or 5 star facility, but one-third have none.
Let’s unpack a couple of results:

Non-profits versus for-profits. Non-profits achieve higher scores than for-profits. About 42 percent of for-profits received 1 or 2 stars while only 21 percent of non-profits received the lowest ratings. Similarly, 39 percent of for-profits scored 4 or 5 stars compared to 60 percent of not-for-profits.

Smaller facilities versus large: Those with fewer than 60 beds did much better than their larger competitors. Only about one in five small sites received 1 or 2 stars compared to 37 percent of facilities with 60-120 beds, and 45 percent of those with more than 120 beds. It was the same story for the highest scores. Almost two-thirds of small homes got 4 or 5 stars compared to only 43 percent of mid-sized facilities and one-third of the largest.

 

The Waters of Scottsburg, a skilled nursing home and rehabilitation facility in Indiana, is under investigation after inappropriate nude photos of a resident were allegedly posted by employees on social media.  The facility discovered the invasion of privacy a few days after the inappropriate photographs were reportedly taken of one of its residents by an employee. Officials at The Waters did confirm the three nursing assistants involved have been suspended for taking advantage of a resident, according to local TV station WHAS11.  The incident was reported to have occurred May 16, and was directed to the Scottsburg Police Department and the Indiana Department of Health.

Hope Shepherd, an 84-year-old resident at the Berea Gardens Retirement Foundation Lily Kirchmann nursing home in East London, was beaten on video by her caregiver. See article and disturbing video here.  Ncendiswa Mkencele was tasked with keeping Shepherd in her bed. The frail older woman had a reputation for being somewhat combative, according to a report from MSN, but what happened on the surveillance footage went too far.

According to Mkencele, Hope Shepherd pushed her too far by throwing feces in her face and directing racial slurs against her. The video above doesn’t come with any indication this is what happened, though Shepherd does appear to be combative throughout.

 

In March 2015, the Consumer Financial Protection Bureau issued a study criticizing the use of pre-dispute arbitration in connection with consumer financial products or services. The Bureau’s study could serve as its justification for rules prohibiting or significantly restricting pre-dispute arbitration agreements in contracts for consumer financial products or services.

After the study came out, Senator Al Franken (D-MN) and Representative Hank Johnson (D-GA) introduced the Arbitration Fairness Act of 2015 (AFA), which would amend the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.(FAA), by invalidating mandatory pre-dispute agreements requiring arbitration of employment, consumer, antitrust, or civil rights disputes. Agreements to arbitrate those four categories of disputes could only be made after a dispute has arisen. The AFA would continue to allow mandatory pre-dispute arbitration provisions in business-to-business agreements, and would not apply to collective bargaining agreements.

The proposed legislation would also clarify that Courts, rather than arbitrators, determine the validity and enforceability of arbitration agreements under federal law, regardless of whether the party resisting arbitration focuses its challenge specifically on the arbitration agreement, or instead offers a broader challenge to the enforceability of the parties’ contract.

The proposed AFA would remedy several key problems of arbitration under the FAA:

  • It would invalidate existing mandatory pre-dispute arbitration clauses because the AFA would apply “with respect to any dispute or claim that arises on or after” the date the AFA is passed.
  • It would empower impartial and unbiased Courts to rule on the validity and enforceability of an arbitration agreement.
  • As it requires both sides to agree to arbitration after the dispute arises, it would ensure that parties agree on all material terms and the scope of the arbitration.
  • The legislation would protect consumer’s consitutional right to a jury trial.

 

WREX reported the tragic situation involving Dolores Hummel, a resident at Rochelle Rehabilitation and Health Care Center. Her daughter, Gayle Linden, said at first the facility was great and Dolores was happy but that all changed in May 2013. “We were getting disgusted with things being stolen, clothes being stolen, food being stolen. Just the quality of care going down. the good nurses aids were leaving,” said Linden.

Illinois Department of Public Health (IDPH) records say nurses noticed Dolores needed oxygen so a nurse grabbed an oxygen canister and hooked the tubing up to her face. Then the nurse left the room. Moments later IDPH documents say Dolores began screaming, “Help me. Get it off”. A nurse says  “…The canister was spewing a white substance that looked like snow… (Hummel’s) “left ear, both cheeks, and under her nose were fire red.”   Pure liquid oxygen was burning Dolores at negative 297 degrees.  According to state documents, staff didn’t know how to use liquid oxygen and the facility didn’t train its staff properly to use liquid oxygenDespite second degree burns she was not taken to the hospital.

“She could barely talk, her tongue and lips were so swollen. You could barely make out what she was saying,” said Linden.  Gayle took pictures showing the burns on her mother’s face. A physician ordered chest x-rays, but IDPH says the facility never did them.  Five days after the incident, Dolores died.  Gayle says the pain from the incident led her mother to an early grave.

“I in my heart truly believe this lady would have lived to be her 100th birthday, which was August 26 and which was her goal, if this horrific, horrific negligence hadn’t happened to her,” she said.  “She was a very lovely lady, she did not (deserve) to die this horrific death,” she said.

NPR had an article on bedbugs in nursing homes.  Exterminators saying they’re getting more and more calls for bedbug infestations in nursing homes, hospitals and doctor’s offices.  Nearly 60 percent of pest control professionals have found bedbugs in nursing homes in the past year, according to an industry survey, up from 46 percent in 2013.

“There are a lot of theories as to why they’ve made a comeback,” Fredericks says. It could be differences in pest management practices, insecticide resistance, or just increased travel. “Bottom line is nobody knows what caused it, but bedbugs are back.” He falters for a moment. “And they’re most likely here to stay.”

Fredericks says the recent multiplication of bedbug reports in medical facilities is just a part of a larger trend. Exterminators have been finding more of the bugs everywhere the parasites are most commonly found like hotels, offices, and homes, where virtually 100 percent of pest control professionals have treated bedbugs in the past year. And they’ve been popping up in a few unexpected places, too, like a prosthetic leg and in an occupied casket.

 

Holly Fletcher for The Tennessean wrote an interesting article about a new study on hospital discharges to skilled nursing homes.  Vanderbilt University Medical Center and Massachusetts Institute of Technology analyzed claims data from more than 1.5 million Medicare patients across every zip code in the country who needed emergency hospital care for injuries such as hip or femur fractures or intercerebral hemorrhage stroke.  A key finding is that patients who are sent to a “high intensity hospital,” such as an academic or specialized hospital, had better chances of survival at the one-year mark.  The authors found a higher mortality rate within a year of discharge in patients who were sent to a skilled nursing facility before going home.

The mortality rate may be directly linked to care received at the nursing facility, the seriousness of illness or care at the hospital.  The report indicates it’s important to look at the quality of treatment that money buys rather than the quantity of treatment, Graves said. Better outcomes, or in this case survival at the one-year mark, is more linked to specialized care rather than quantity or duration of treatment.

The Kentucky Center for Investigative Reporting had an illuminating article by James McNair about sales-boosting schemes and drug therapy in nursing homes.

Abbott Laboratories paid millions of dollars in “rebates” to get pharmacy companies to pump up prescriptions of an anti-seizure drug to agitated dementia patients in nursing homes, a use not approved by the Food & Drug Administration. Medicaid payments for the drug, Depakote, went on to top $7 billion. Thanks to a whistleblower lawsuit, the Justice Department caught on. Abbott pleaded guilty in 2012 to a criminal charge, settled civil kickback and fraud claims and paid $1.5 billion in fines.

The drug giant Amgen Inc. enlisted the same pharmacy companies to promote its Aranesp anemia drug for uses beyond its FDA approval. Again alerted by a whistleblower suit, the Justice Department stepped in. Amgen pleaded guilty to the crime of drug misbranding, settled civil kickback and fraud charges and paid a total of $762 million in fines.

The defendant remaining in both civil cases is called PharMerica Corp.. PharMerica has no retail stores, but is the second-biggest operator of nursing home pharmacies in the country. It has about 6,000 employees in 45 states. With $1.9 billion in revenue last year, it is the 10th-biggest publicly traded company in Kentucky, according to rankings by The Lane Report.

PharMerica was formed by a merger in 2007. Before that it existed as the institutional pharmacy divisions of Kindred Healthcare, a Louisville company, andAmerisourceBergen of Chesterbrook, Pa. It hired Gregory Weishar (pronounced WISH-er) as chief executive in 2007. He has run the company ever since.

“PharMerica provides the right medication at the right time,” states the company’s website.Companies like PharMerica, and its larger competitor Cincinnati-based Omnicare Inc., occupy a strategic place in the flow of drugs to nursing home patients. Acting on behalf of the homes, they buy drugs from the pharmaceutical companies in bulk, often repack them in foil packs, or “bingo cards,” and dispense them under the supervision of employees known as consultant pharmacists. PharMerica says it has a 15 percent share of the U.S. market. It calls its performance “industry-leading.”

The civil suits accuse PharMerica of giving certain drugs to nursing home patients in return for drug company kickbacks, not because they were the “right medication.” The suits were filed by drug company insiders who claim to have knowledge of payoffs disguised as “rebates” or “discounts.”  Paying kickbacks appear to be standard practice in the pharmaceutical industry. The Justice Department doesn’t keep count, but kickbacks are a common theme in the many Medicare and Medicaid cases involving aggressive new-drug rollouts and off-label switcheroos.

Since 2005, it has agreed to pay $40 million in fines to settle federal complaints. Last week, the Justice Department said PharMerica will pay $31.5 million to settle allegations that it dispensed addictive painkillers to nursing home patients without prescriptions, then falsely billed Medicare. In that case, three PharMerica pharmacists in Wisconsin and Florida civilly accused the company of regularly dispensing painkillers, such as fentanyl patches, to nursing home patients without prescriptions from 2007 through 2009.  As part of the settlement, PharMerica agreed to a five-year “corporate integrity agreement,” a probation-like deal that places burdensome compliance obligations on corporate fraudsters.

In earlier settlements, three of its Virginia pharmacies were accused in two civil suits of giving painkillers to nursing home patients without prescriptions on 1,233 occasions. Separately, it was accused of billing the Tennessee Medicaid program for more drugs than it actually dispensed. And, again in Virginia, the U.S. Department of Health & Human Services’ Office of Inspector General accused PharMerica of paying an exorbitant amount for a newborn pharmacy in return for the lucrative meds business of the pharmacy owner’s 25 nursing homes.

The last case was deemed so flagrant that the IG sought to ban PharMerica from federal healthcare programs for 10 years. It settled, in 2005, for a $6 million fine and a five-year corporate integrity agreement.

Sources: Court records

 

Patrick Burns, co-director of Taxpayers Against Fraud, had no reservations talking about PharMerica.  Burns said the pipeline from pharmaceutical companies to nursing homes is flush with monetary incentives to promote certain drugs and to sell more of them. Ultimately, he said, drug sales greased by kickbacks at the expense of nursing home residents, Medicare and Medicaid amount to profiteering.  “That’s the perversion of the system,” Burns said. “At the end of the day, our oldest, sickest and poorest become cash cows.”

AARP, which represents 38 million Americans 50 and older, denounces the practice of financially induced drug-switching.  “Such behavior is particularly troubling when the prescription drugs in question are being used in a manner that is inconsistent with the product labeling,” said Leigh Purvis, director of health services research at AARP’s Public Policy Institute. Prescribing should be based on what is clinically appropriate for a given patient, not financial incentives.”

Jan Scherrer, vice president of Kentuckians for Nursing Home Reform, a non-profit advocacy group in Lexington, said CEOs of companies involved in the kickback schemes should be held personally accountable.  It’s the same players — PharMerica and Omnicare,” Scherrer continued. “They keep doing this over and over and over, and all they get is a fine. And for them that fine is nothing more than the cost of doing business.”“I don’t understand why the CEOs of these companies aren’t being prosecuted. Why aren’t they being put in jail?” she said. “These are not victimless crimes. There are people in these nursing homes who are dying because they are being given these drugs.”