St. Louis Today had an editorial about the recent NY Times report on the outsourcing of management and “back office”support services to companies owned and operated by the owners of the nursing home. These business dealings, known as related-party transactions.  In the nursing home industry, however, with its reliance on taxpayer dollars, related-party transactions can also encourage insider dealing, maximizing profits for the outside vendors while siphoning off funds needed for patient care and staffing.

“So the question of who’s profiting from meeting — or not meeting — their needs is a matter of great public import. People’s lives can and do hang in the balance.”

In a remarkable story published Dec. 31, Kaiser Health Newsreported that the owners of nearly three-quarters of the 15,600 nursing homes in the United States buy a wide variety of goods and services from companies in which they have a financial interest or control. Nursing home owners can rent the land to themselves at above-market rates, or own the staffing company that provides nursing care and management.

 Relative to homes that don’t have related-party transactions, Kaiser reported, nursing homes that do deal with related parties have an average of 8 percent fewer aides and nurses on staff and are 9 percent more likely to have injured a resident or put him at risk. They have 35 percent more complaints and are fined 22 percent more frequently by government regulators.

For nursing home owners, a complex web of related-party transactions can offer a shield against lawsuits or governments seeking restitution for Medicaid overpayments.

This is outrageous. America’s vulnerable elderly shouldn’t be a profit center. Government should protect people and tax dollars, not profits.

The New York Times had a great article explaining how and why for profit chains game the system by siphoning funds to owners instead of to patient care.  Contracts with “related companies” accounted for $11 billion of nursing home spending in 2015 — a tenth of their costs — according to financial disclosures the homes submitted to Medicare.  A Kaiser Health News analysis of inspection and quality records reveals that nursing homes that outsource to related organizations tend to have significant shortcomings: They have fewer nurses and aides per patient, they have higher rates of patient injuries and unsafe practices, and they are the subject of complaints almost twice as often as independent homes.  For-profit nursing homes utilize related corporations more frequently than nonprofits do, and have fared worse than independent for-profit homes in fines, complaints and staffing, the analysis found. 

“In what has become an increasingly common business arrangement, owners of nursing homes outsource a wide variety of goods and services to companies in which they have a financial interest or that they control. Nearly three-quarters of nursing homes in the United States — more than 11,000 — have such business dealings, known as related party transactions, according to an analysis of nursing home financial records by Kaiser Health News. Some homes even contract out basic functions like management or rent their own building from a sister corporation, saying it is an efficient way of running their businesses and can help minimize taxes.”

“These arrangements offer an additional advantage: Owners can arrange highly favorable contracts in which their nursing homes pay more than they might in a competitive market. Owners then siphon off higher profits, which are not recorded on the nursing home’s accounts.”

“Such corporate webs bring owners a legal benefit, too: When a nursing home is sued, injured residents and their families have a much harder time collecting money from the related companies — the ones with the full coffers. Courts set a high bar for plaintiffs to bring these ancillary companies into their cases.”

“Almost every single one of these chains is doing the same thing,” said Charlene Harrington, a professor emeritus of the School of Nursing at the University of California, San Francisco. “They’re just pulling money away from staffing.”

Kaiser Health News’s analysis of inspection, staffing and financial records nationwide found shortcomings at other homes with similar corporate structures:

■ Homes that did business with sister companies employed, on average, 8 percent fewer nurses and aides.

■ As a group, these homes were 9 percent more likely to have hurt residents or put them in immediate jeopardy of harm, and amassed 53 substantiated complaints for every 1,000 beds, compared with 32 per 1,000 beds at independent homes.

■ Homes with related companies were fined 22 percent more often for serious health violations than independent homes, and penalties averaged $24,441 — 7 percent higher.

The Record Online reported that New York Department of Health is investigating staffing levels and living conditions for seniors at Sapphire Nursing and Rehab at Goshen, amid calls by local politicians to do so.   Last month, the home formerly known as Elant at Goshen laid off more than half its nurses, according to layoff letters and staff memos obtained by the Times Herald-Record.  Since the recent completion of its sale by nonprofit Elant to for-profit Goshen Operations, the home was rebranded Sapphire.

Sapphire’s nurse tally has fallen 54 percent since June to 17 nurses, including two registered nurses and 15 licensed practical nurses, according to 1199 SEIU United Healthcare Workers East.  Six months ago, there were 37 nurses — 12 RNs and 25 LPNs, the union said.

This month, the 120-bed home began using one LPN per every 40 residents from 7 a.m. to 11 p.m. compared with one LPN per 20 residents previously, the union said. Seven of the home’s leaders, including Sapphire Executive Administrator Crystal Cummings, and key staff members have either resigned or been laid off since mid-December, the union added.

“The reports we’re getting from family members of folks at Sapphire and the local health care community are incredibly disturbing, and we must get to the bottom of it,” Maloney said in a statement. “Denying these older Americans the dignity and comprehensive care they deserve is infuriating, and Assemblyman Skoufis and I will stay on this until we’re sure they’re getting the level of respect and care they deserve.”

“Patients, family members and their nurses deserve far better than what we’ve seen out of Sapphire,” Skoufis wrote. “From the reports I’ve received, the level of care has been ravaged due to the for-profit owners’ excessive cuts. The Department of Health needs to intervene, and quickly.”


WABE reported on the problem of infections in Georgia nursing homes.  The article was written by Andy Miller, editor and CEO of Georgia Health News. Kaiser Health News study and analysis of federal inspection records found that 43 percent of Georgia nursing homes have been cited for infection-related problems in recent years.  The KHN analysis of four years of federal inspection records shows 74 percent of nursing homes nationally have been cited for lapses in infection control — more than for any other type of health violation.

Nationwide, only one of 75 nursing homes found deficient in those four years has received a high-level citation that can result in a financial penalty, the analysis found.

The federal Centers for Medicare and Medicaid Services has required long-term care facilities to establish better systems to prevent infections, detect outbreaks early on and limit unnecessary use of antibiotics through a stewardship program.  Infections cause a quarter of the medical harm cases that Medicare beneficiaries experience in nursing homes, according to a federal report. They are among the most frequent reasons why residents are sent back to the hospital.

As average hospital stays have shortened from 7.3 days in 1980 to 4.5 days in 2012, patients who a generation ago would have recuperated in hospitals now go to nursing homes for short term rehabilitation.  This increases the acuity and needs of the residents without a corresponding increase in the necessary staffing.

You’ve got this influx of vulnerable patients, but the staffing models are still geared more to the traditional long-stay resident,” said Dr. Nimalie Stone, the Centers for Disease Control and Prevention’s medical epidemiologist for long-term care. “The kind of care is so much more complicated that facilities need to consider higher staffing.”



The Anderson Independent Mail had two articles on national for-profit nursing home chain Orianna.  See articles here and here.  Orianna Health Systems is a Tennessee-based company that runs 13 Upstate nursing homes, more than any other provider.

One article discussed the quality of care issues at Orianna’s facilities in Greenville where residents complained that staff members were slow to respond to call lights; some reported waiting 50 minutes for requested pain medication without receiving it, according to the inspection report. A resident interviewed that afternoon said “call lights often yield no response and sometimes the resident must yell or shout for assistance.”

Another resident complained that staff members “seem upset that you rang your bell and they tell you to wheel yourself around,” according to the report, which also listed nine grievances that had been filed between March and August about slow responses to call lights.  Citing the failure to respond to call lights in a timely manner, the inspection report found that the nursing home had not provided care “that keeps or builds each resident’s dignity and respect of individuality.”

Linville Court at Cascades Verdae was one of three Upstate nursing homes where inspectors found a number deficiencies that exceeded state and national averages between April 5 and Aug. 25, according to the most recent records from the Centers for Medicare & Medicaid Services.

A total of 12 deficiencies were found at Greenville Rehabilitation and Healthcare Center, according to a July 19 inspection report. Eight deficiencies were found at The Arboretum at the Woodlands nursing home in Greenville, according to a May 4 inspection report.

One of the deficiencies at Greenville Rehabilitation and Healthcare Center involved a January incident in which a certified nursing assistant verbally abused a resident. The nursing assistant later resigned, according to the inspection report.

Another deficiency listed in the inspection report involved the nursing home’s failure to adequately address a 22-pound weight loss by a resident during a six-week period. The nursing home was also cited for a medication error rate of 11.1 percent, which is more than twice the acceptable rate.

The inspection report cited numerous environmental problems at the nursing home, including the presence of flies in the kitchen and other areas. The report said a resident was seen swatting files with a wash cloth in an activity/dining room.

Other deficiencies included a failure to provide proper treatment to prevent bed sores or heal existing bed sores and a failure to store, cook and serve food in a safe and clean way, according to the inspection report.

A state inspector also visited The Arboretum at the Woodlands in June in response to a complaint. According to the inspection report, a staff member was found asleep in the nursing home’s living room during an 11 p.m. to 7 a.m. shift on May 25.

Mikki Meer, chief operating officer for Orianna Health Systems, said in an email that her company “is proud of the continued improvement demonstrated in the recent survey results of its South Carolina facilities.”

Meanwhile the second article explains why the quality of care at Orianna’s nursing homes has gone down.  Orianna has serious financial problems as a result of mismanagement and the siphoning of funds to the corporate owner’s pockets.  Orianna has now fallen behind on lease payments for its facilities to Omega Health Investors, a Maryland-based healthcare real estate investment trust.

Taylor Pickett, Omega’s CEO, reported that since 2014, the occupancy rate at Orianna’s facilities has declined from 92 percent to 89 percent and expenses have grown by 6 percent while revenues increased only 2 percent.

As recently as July, Orianna was operating 48 skilled nursing facilities with 5,000 total beds in 11 states, according to the company’s website. The latest version of the website says the company is now managing 43 skilled nursing facilities with a total of 4,500 beds in seven states.

  • Nine of Orianna’s homes agreed to pay $4.46 million to settle lawsuits involving the deaths of 20 residents. That total includes three settlements adding up to $752,500 that were approved after last year’s name changes.
  • Inspectors found at least 525 deficiencies at the company’s Upstate nursing homes, according to the Centers for Medicare & Medicaid Services. The deficiencies included instances of neglect, possible cases of abuse that were not investigated and medication errors, as well as failures to eliminate hazards, properly prepare meals and treat residents with dignity. The most dangerous deficiencies resulted in 26 fines totaling nearly $495,000.
  • The company’s nursing homes were responsible for 47 percent of the inspection-related deficiencies and 49 percent of fines at Upstate nursing homes. Orianna’s facilities account for 38 percent of the overall nursing home beds in the region.

The Kokomo Tribune reported that two former owner/operators of nursing homes agreed to plead guilty in a kickback scheme involving millions of dollars.  American Senior Communities CEO James Burkhart and Chief Operating Officer Daniel Benson have reached plea agreements that could put them in prison for decades.

Burkhart and Benson were indicted in 2016 along with Burkhart’s friend, Steven Ganote, and Burkhart’s brother, Joshua Burkhart. Ganote and Joshua Burkhart also have reached plea deals.

Federal prosecutors who indicted the men on a total of 32 counts say they took part in a kickback scheme between January 2009 and September 2015 that netted them $16 million. Prosecutors said the men used shell companies to falsify and inflate costs of goods and services, which enabled them to steal discounts and rebates, and conceal kickbacks during the six-year period.

Prosecutors said the men used the money to buy lavish items, such as vacation homes, jewelry and gold bars.

The company manages nearly 100 senior care facilities, including 60 locations under a contract with Marion County’s public health agency. The county is home to Indianapolis.

More than three months after Oak Terrace Healthcare Center  nursing home closed with little warning, many families and former patients  are waiting for refunds and wondering why they were put through such stress.  Oak Terrace’s two most recent administrators blame Home Life Companies, the Delaware, Ohio-based business whose top officials made all the key decisions involving Oak Terrace, for what they say was the company’s greed, ignorance and lack of vision.

The residents — they didn’t have any interest in them except as a source of revenue,” former Oak Terrace administrator Tom Mullins told The State Journal-Register.′  Mullins said he isn’t satisfied with Oak Terrace’s finger-pointing and claims of poverty.  Home Life Companies, which says on its website that it manages long-term care communities in several states, mostly in the Midwest and South, could transfer money from its headquarters to pay him and vendors, Mullins said.

One lesson from the Oak Terrace situation may be that families should investigate a long-term care facility’s finances as much as possible, and ask questions when they see evidence of problems such as empty halls, said Megan Jizmagian, the Springfield-based regional long-term care ombudsman.

David Mabry, who was administrator from January until late August, when Mullins took over, said he realized Oak Terrace wasn’t properly billing Medicaid when he arrived in January. After many frustrating communications with Home Life over spending, he said he resigned after he was instructed to begin transferring Medicaid patients to other nursing homes and reduce staffing levels. “There were so many things that needed to be fixed in the building, it was incredible,” said Mabry, who is certified as a nursing home administrator and licensed practical nurse.


The News-Gazette reported the lawsuit filed against the Champaign County Nursing Home in connection with the death of Sonya J. Kington, a 78-year-old Alzheimer’s resident who died of hyperthermia after being left unsupervised outside the home.  According to an investigation by the coroner’s office, video footage from inside the nursing home appeared to show Ms. Kington entering the courtyard at 1:47 p.m. It isn’t until about 5:15 p.m. that staff members are seen searching for her.

Her limp body was found in an exterior courtyard on a hot day when the high temperature reached 87 degrees.  At the time she was found in the courtyard, Ms. Kington was lying in direct sunlight, her skin was “very hot to touch” and she had vomit on both sides of her mouth.  Ms. Kington’s death was caused by hyperthermia brought on by exposure to hot weather.

The suit alleges that the nursing staff at the nursing home “failed in their duty to provide the necessary services and treatments to prevent the death of Ms. Kington in failing to properly secure the facility and in failing to properly supervise Ms. Kington.”

The L.A. Times reported the problem with infection control at nursing homes, and the lack of enforcement by investigators.  “Basic steps to prevent infections — such as washing hands, isolating contagious patients and keeping ill nurses and aides from coming to work — are routinely ignored in the nation’s nursing homes, endangering residents and spreading hazardous germs.”

Inspection records show nurses and aides are often not familiar with basic protocols, such as wearing protective clothing when coming into contact with contagious residents and isolating them from others in the home and visitors. Others are not trained properly on how to clean patients. Still others, in a rush and understaffed, take shortcuts that compromise sanitary precautions

Infections, most of which are avoidable, cause a quarter of the medical injuries Medicare beneficiaries experience in nursing homes, according to a federal report. They are among the most frequent reasons residents are sent back to the hospital. By one government estimate, healthcare-associated infections may result in as many as 380,000 deaths each year.

A Kaiser Health News analysis of four years of federal inspection records shows 74% of nursing homes have been cited for lapses in infection control — more than for any other type of health violation.  However, only 1 of 75 homes found deficient in those four years has received a high-level citation that can result in a financial penalty, the analysis found.  Only 161 homes among the 12,056 that violated infection-control rules were cited at those higher levels since 2014, according to Kaiser Health News’ analysis.

As average hospital stays have shortened to 4.5 days in 2012 from 7.3 days in 1980, patients who a generation ago would have fully recuperated in hospitals now frequently conclude their recoveries in nursing homes.  “You’ve got this influx of vulnerable patients but the staffing models are still geared more to the traditional long-stay resident,” said Dr. Nimalie Stone, the Centers for Disease Control and Prevention’s medical epidemiologist for long-term care. “[That] kind of care is so much more complicated that facilities need to consider higher staffing.”

The Centers for Medicare and Medicaid Services (CMS) is responsible for developing standards for rehabilitation facility and nursing home care (includes rehabilitation facilities) and ensuring those standards are met. Every nursing home that accepts Medicare and/or Medicaid is required by law to abide by the regulatory standards developed by CMS.

However, Federal regulations designed to protect the safety and well-being of residents in the nation’s nursing homes are facing mounting pressure from Congress.  A group of 146 lawmakers, many of whom have received substantial campaign contribution from the nursing home industry, has urged the Trump Administration to revise safety standards in nursing homes.   The industry contributed more than $2.5 million to the campaigns of 128 lawmakers who signed the letters, according to the website FollowTheMoney .org, which trackspolitical contributions.  The industry gave a total of more than $1.98 million to 104 House members, and $587,000 to 24 Senators, who signed the letters seeking the re-evaluation of the standards, according to FollowTheMoney.

Nursing home experts, and advocates for residents contend the regulations are needed for safety, quality of care, and transparency; the measures will expand care plans, offer greater freedom for residents, increase the amount of training for nurses and aides caring for residents with dementia and provide grievance officers to help handle complaints.  Nursing home residents have higher needs than in 1991, when federal regulations were first enacted. Nursing home care is one step below the hospital setting and half of all residents have a form of dementia.

The changes in the standards offer greater focus on residents’ safety and well-being, according to the National Consumer Voice for Quality Long Term Care , an advocacy organization in Washington, D.C. For instance, says the organization, the changes:

  • Would stress greater residents’ freedoms in choice, from food selection to daily schedules, such as when to go to bed and when to wake up. Also, visitors can stop by at any time.
  • Require nursing homes to perform a baseline care assessment within 48 hours of a resident’s arrival. The plan sets out initial goals for residents, including physician and dietary orders. Under the previous regulations, nursing homes could take up to three weeks to develop a care plan.
  • Include a grievance officer at each facility, who would handle complaints of residents and families. An infection prevention specialist would be added as well. This would not require an additional hire, as a nurse on staff, with increased training, could be assigned the position.
  • Add enhanced training for nurses’ aides to deal with residents suffering from dementia.

Advocates for nursing home residents have pushed for years for the CMS to come up with specific regulations for nursing homes regarding the number of nurses and nurse’s aides needed per shift.