Biden unveiled a vaccine mandate for nursing homes. What does it mean for the staffing crisis?

Rethinking How We Approach Long-Term Care In The U.S. | On Point

On Wednesday, President Joe Biden unveiled a new plan requiring nursing homes to vaccinate their employees or lose federal funding. Industry members are concerned the mandate will exacerbate current staffing shortages and make it harder for facilities to care for their residents. 

Biden ties employee vaccination to federal funding for nursing homes

Biden announced on Wednesday that nursing homes will have to require their workers be vaccinated against Covid-19 to receive Medicare and Medicaid funding, the New York Times reports.

CMS is expected to release an emergency rule covering this new requirement in September, according to Roll Call. Officials said the decision will affect more than 15,000 nursing homes with around 1.3 million workers across the country.

In a statement, CMS administrator Chiquita Brooks-LaSure said, “Keeping nursing home residents and staff safe is our priority. The data are clear that higher levels of staff vaccination are linked to fewer outbreaks among residents, many of whom are at an increased risk of infection, hospitalization, or death.”

As of Aug. 8, federal data showed that around 62% of all nursing home staff are currently vaccinated. But vaccination rates vary widely by state, with a high of 88% in some states and a low of 44% in others.

In addition, according to data from CMS, nationwide Covid-19 cases in nursing homes have increased from 319 cases on June 27 to 2,696 cases on Aug. 8. Since the beginning of the pandemic, federal data shows that around 134,000 nursing home residents and nearly 2,000 employees have died from Covid-19.

How will the vaccine mandate affect nursing homes?

According to Roll Call, divisions among nursing home staff about a vaccine mandate has some people in the industry—which has long suffered staffing shortages—concerned that even more workers will leave.

Lori Porter, CEO of the National Association of Health Care Assistants, said she is worried the industry could lose 20% to 30% of its workforce over the new vaccine requirement.

And Mark Parkinson, president and CEO of the American Health Care Association and National Center for Assisted Living, said a broader vaccine mandate for all health care organizations, instead of just nursing homes, is necessary to prevent further staffing shortages.

“Focusing only on nursing homes will cause vaccine hesitant workers to flee to other health care providers and leave many centers without adequate staff to care for residents,” Parkinson said. “It will make an already difficult workforce shortage even worse.”

Similarly, Katie Smith Sloan, president and CEO of LeadingAge, a nonprofit that represents more than 5,000 aging services providers, said the vaccine mandate should be extended to all health care workers in all settings. She also voiced concern that cutting funding to nursing homes will further hurt facilities that have struggled financially throughout the pandemic.

“Without Medicaid and Medicare funding, nursing homes cannot provide the quality care that our nation’s most vulnerable older adults need,” Smith Sloan said. “Our mission-driven nursing home members, who operate on narrow margins in the best of times, depend on those funds alone to care for their residents.”

Separately, David Grabowski, a professor of health care policy at Harvard Medical School, said funding cuts could put some nursing homes “in a precarious position” and that he believes there will be a “tremendous amount of pushback in the industry.”

Grabowski noted that while a national vaccine mandate could “level the playing field” for nursing homes looking for employees, they may still struggle to retain employees with jobs in other areas, such as retail or hotels, offering similar pay. “I think this is a good measure, but it needs to be paired with additional resources to help pay staff and make sure these are jobs they want to stay in,” he said. (Clason, Roll Call, 8/18; LaFraniere et al., New York Times, 8/18; Christ, Modern Healthcare, 8/18) 

Advisory Board’s take

This is a bold step—but it’s the right thing to do. Here’s why.

Mandating vaccinations for staff in skilled nursing facilities (SNFs) is definitely a bold step—but ensuring all staff are vaccinated is unquestionably the right thing to do. As health care leaders, it is our responsibility to care for our patients, our staff, and our communities, and during this pandemic, vaccination is the best way to do that. 

Nationally, staff working in post-acute and long-term care settings have been among the groups most hesitant to take a Covid-19 vaccine. The combination of the extremely vulnerable patient populations in those settings and the lack of voluntary vaccination was likely what motivated this move.

I don’t want to imply this will be easy. Many SNFs will struggle to achieve universal vaccination, and there is understandable fear associated with having to let go of staff in what is an extremely tight staffing environment. 

However, in my view, the staffing implications will be less severe than many believe. In some ways, a national mandate actually makes it easier for providers, because individual staff members can’t simply go work for another facility in order to avoid getting their shot. And as more and more employers across the country begin to mandate vaccinations—a list that so far includes large employers like Walmart and Tyson Foods—staff members will have minimal opportunities for alternate work arrangements that do not require them to get the vaccine. For many staff, even those who have refused in the past, the elimination of other options that would allow them to remain unvaccinated may give them the push they need to get the vaccine.

Some staff will refuse and leave the industry. In the short term, this will increase pressure on already tight staffing. In the medium to long term, however, a fully vaccinated workforce is better for providers. It’s better for recruiting, because it attracts potential workers who want to be in a safer environment. It’s better for the existing workforce, who will likely need to take fewer sick days. And it’s better for the reputation of the industry. In our summer consumer survey, we found that 76% of respondents would be more likely to receive care at a skilled nursing facility if all of that facility’s staff were vaccinated. Staff vaccination helps build a level of community trust in the safety of the facility, which will be critical as SNFs seek to return to growth during and after the Covid-19 pandemic.

Check out our resources for building consumer confidence in post-acute and senior care during and beyond a crisis. For help with how to prepare your staff and residents for the vaccine rollout at your facility, review our guide for long-term care leaders.

Are recent labor actions getting nursing unions what they want?

While nurses in Cook County, Illinois, struck a deal in recent days, those on a three-month-plus strike against a Tenet hospital in Massachusetts plan a protest at the chain’s Dallas headquarters.

Thousands of healthcare workers have waged strikes this summer to demand better staffing levels as the pandemic brought greater attention to what happens when a nurse must take care of more patients than they can reasonably handle.

In New York, a report from the attorney general that found nursing homes with low staffing ratings had higher fatality rates during the worst COVID-19 surges last spring helped spur legislators to pass a safe staffing law long-advocated for by the New York State Nurses Association.

While unions elsewhere face a steeper climb to win the success found in New York, through strikes and other actions, they’re attempting to get new staffing rules outlined in their employment contracts.

Most nursing strikes include demands for ratios, or limits on the number of patients a nurse can be required to care for, Rebecca Givan, associate professor in the School of Management and Labor Relations at Rutgers University, said.

“And employers are very anxious about that because it threatens their bottom line, so often when a compromise is found, it’s something that approaches a ratio but maybe has a bit more flexibility,” Givan said.

Some have been successful, like the 1,000 Chicago-area nurses at Stroger Hospital, Provident Hospital and Cook County Jail who waged a one-day strike on June 24 after negotiating with the county over a new contract for nearly eight months.

They reached a tentative agreement shortly after the strike, stipulating the hiring of 300 nurses, including 125 newly added positions throughout the system within the next 18 months.

The deal also includes wage increases to help retain staff, ranging from 12% to 31% over the contract’s four-year term, according to National Nurses United.

Meanwhile, 700 nurses at Tenet’s St. Vincent Hospital in Worcester, Massachusetts, have been on strike for over 100 days over staffing levels. Nurses represented by the Massachusetts Nurses Association have been trying to get an actual nurse-to-patient ratio outlined for specific units in their next contract.

The two sides haven’t come close to reaching a deal yet, and some nurses will travel to Tenet’s headquarters in Dallas on Wednesday in an attempt to appeal to corporate executives, according to MNA.

At the same time, federal lawmakers wrote to Tenet CEO Ron Rittenmeyer seeking details on the chain’s use of federal coronavirus relief funds amid the strike and alongside record profits it turned last year.

The hospital denied lawmakers’ claims in the letter that Tenet used federal funds to enrich executives and shareholders rather than meet patient and staff needs, saying in a statement it strongly objects to the “mischaracterization of the facts and false allegations of noncompliance with any federal program.”

The strike is currently the longest among nurses nationally in a decade, according to the union.

A number of other major hospital chains have contracts covering their nurses expiring this summer, including for-profit HCA Healthcare and nonprofit Sutter Health.

Unionized nurses at 10 HCA hospitals in Florida have reached a deal on a new collective bargaining agreement, though members still need to ratify it, according to National Nurses United. The details are still unclear.

And after joining NNU just last year, 2,000 nurses at HCA’s Mission Hospital in Asheville, North Carolina, ratified their first contract Saturday, which includes wage increases and the formation of a nurse-led staffing committee.

Newly-formed unions take an average of 409 days to win a first contract, according to an analysis from Bloomberg Law. In the healthcare industry, new unions take an average of 528 days to win a first contract, the longest among all sectors examined.

Across the country at Sutter’s California hospitals, disputes haven’t been so easily resolved. Healthcare workers at eight Sutter hospitals planned protests throughout July “to expose the threat to workers and patients caused by understaffing, long patient wait times and worker safety issues at Sutter facilities,” according to Service Employees International Union United Healthcare Workers West, which represents the workers.

Similar to the ongoing Tenet hospital strike, SEIU is highlighting Sutter’s profits so far this year and the federal relief funds it received.

Study: Higher Death Rates and Taxpayer Costs at Nursing Homes Owned by Private Equity

About 1 in 10 nursing homes in California and nationwide are owned by private equity (PE) investors, and new research suggests that death rates for residents of those facilities are substantially higher than at institutions with different forms of ownership.

Essential Coverage

Researchers from New York University, the University of Chicago, and the University of Pennsylvania found that the combination of subsidies from Medicare and Medicaid alongside incentives for PE owners to increase the value of their investments “could lead high-powered for-profit incentives to be misaligned with the social goal of affordable, quality care [PDF].” The researchers — Atul Gupta, Constantine Yannelis, Sabrina Howell, and Abhinav Gupta — reported that nursing homes owned by private equity entities were associated with a 10% increase in the short-term death rate of Medicare patients over a 12-year period. That means more than 20,000 people likely died prematurely in homes run by PE companies, according to their study, which was published in February by the National Bureau of Economic Research (NBER).

In addition to the higher short-term death rates, these homes were found to have sharper declines in measures of patient well-being, including lower mobility, increased pain intensity, and increased likelihood of taking antipsychotic medications, which the study said are discouraged in the elderly because the drugs increase mortality in this age group. Meanwhile, the study found that taxpayer spending per patient episode was 11% higher in PE-owned nursing homes.

Double-Checked, Triple-Checked, Quadruple-Checked

The researchers were stunned by the data. “You don’t expect to find these types of mortality effects. And so, you know, we double-checked it, triple-checked it, quadruple-checked it,” Atul Gupta, a coauthor of the NBER study, told NPR reporter Gabrielle Emanuel.

There’s nothing new about for-profit nursing homes, but private equity firms are a unique subset that in recent years has made significant investments in the industry, Dylan Scott reported in Vox. PE firms typically buy companies in pursuit of higher profits for shareholders than could be obtained by investing in the shares of publicly traded stocks. They then sell their investments at a profit, often within seven years of purchase. They often take on debt to buy a company and then put that debt on the newly acquired company’s balance sheet.

They also have purchased a mix of large chains and independent facilities — “making it easier to isolate the specific effect of private equity acquisitions, rather than just a profit motive, on patient welfare.” About 11% of for-profit nursing homes are owned by PE, according to David Grabowski, professor of health care policy at Harvard Medical School. The NBER study covered 1,674 nursing homes acquired in 128 unique transactions.

While the owners of many nursing homes may not be planning to sell them, they also have strong incentives to keep costs low, which may not be good for patients. A study funded by CHCF, for instance, found that “early in the pandemic, for-profit nursing homes had COVID-19 case rates five to six times higher than those of nonprofit and government-run nursing homes. This was true of both independent nursing homes and those that are part of a corporate chain.”

Nationallyabout 70% of nursing homes are operated by for-profit corporations, 24% of nursing homes are nonprofit, and 7% are government-owned. Corporate chains own 58%. In California, 84% of nursing homes are for-profit, 12% are nonprofit, and 3% are government-owned, according to the CHCF report.

Growing PE Investment in Health Care

Given the dramatic increase in PE ownership of nursing facilities coming out of the COVID-19 pandemic, the higher death rates are troubling. The year-over-year growth between 2019 and 2020 is especially striking. Before the pandemic, 2019 saw 33 private equity acquisitions of nursing homes valued at just over $483 million. In 2020, there were 43 deals valued at more than $1.5 billion, according to Bloomberg Law reporter Tony Pugh.

And PE interest in health care is not restricted to nursing homes, explained Gretchen Morgenson and Emmanuelle Saliba at NBC News. “Private equity’s purchases have included rural hospitals, physicians’ practices, nursing homes and hospice centers, air ambulance companies and health care billing management and debt collection systems.” Overall, PE investments in health care have increased more than 1,900% over the past two decades. In 2000, PE invested less than $5 billion. By 2017, investment had jumped to $100 billion.

Industry advocates argue that the investments are in nursing homes that would fail without an influx of PE capital. The American Investment Council said private equity firms invest in “nursing homes to help rescue, build, or grow businesses, often providing much-needed capital to strengthen struggling companies and employ Americans,” according to Bloomberg Law.

The Debate Over Staffing

A bare-bones nursing staff is implicated in poorer quality at PE-owned nursing homes, both before and during the COVID-19 pandemic. Staff is generally the greatest expense in nursing homes and a key place to save money. “Labor is the main cost of any health care facility — accounting for nearly half of its operating costs — so cutting it to a minimum is the fastest profit-making measure owners can take, along with paying lower salaries,” journalist Annalisa Merelli explained in Quartz.

Staffing shrinks by 1.4% after a PE purchase, the NBER study found.

The federal government does not set specific patient-to-nurse ratios. California and other states have set minimum standards, but they are generally “well below the levels recommended by researchers and experts to consistently meet the needs of each resident,” according to the journal Policy, Politics, & Nursing Practice.

According to nursing assistant Adelina Ramos, “understaffing was so significant [during the pandemic] that she and her colleagues . . . often had to choose which dying or severely ill patient to attend first, leaving the others alone.”

Ramos worked at the for-profit Genesis Healthcare, the nation’s largest chain of nursing homes, which accepted $180 million in state and federal funds during the COVID-19 crisis but remained severely understaffed. She testified before the US Senate Finance Committee in March as a part of a week long look into how the pandemic affected nursing homes.Before the pandemic, we had this problem,” she said of staffing shortages. “And with the pandemic, it made things worse.”

$12.46 an Hour

In addition, low pay at nursing homes compounds staffing shortages by leading to extremely high rates of turnover. Ramos and her colleagues were paid as little as $12.46 an hour.

“The average nursing home in the US has their entire nursing home staff change over the course of the calendar year. This is a horrible way to provide good, quality nursing home care,” Grabowski told NPR, speaking of his March 2021 study in Health Affairs.

Loss of front-line staff leads to reductions in therapies for healthier patients, which leads to higher death rates, according to the NBER study. The effect of these cuts is that front-line nurses spend fewer hours per day providing basic services to patients. “Those services, such as bed turning or infection prevention, aren’t medically intensive, but they can be critical to health outcomes,” wrote Scott at Vox.

Healthier patients tend to suffer the most from this lack of basic nursing. “Sicker patients have more regimented treatment that will be adhered to no matter who owns the facility,” the researchers said, “whereas healthier people may be more susceptible to the changes made under private equity ownership.”

Growing Interest on Capitol Hill

In addition to the Senate Finance Committee hearings, the House Ways and Means Committee held a hearing at the end of last month about the excess deaths in nursing homes owned by PE. “Private equity’s business model involves buying companies, saddling them with mountains of debt, and then squeezing them like oranges for every dollar,” said Representative Bill Pascrell (D-New Jersey), who chairs the House Ways and Means Committee’s oversight subcommittee.

The office of Senator Elizabeth Warren (D-Massachusetts) will investigate the effects of nursing-home ownership on residents, she announced on March 17.

The hope is that the pandemic’s effect on older people will bring more attention to the issues that lead to substandard nursing home care. “Much more is needed to protect nursing home residents,” Denise Bottcher, the state director of AARP’s Louisiana office, told the Senate panel. “The consequence of not acting is that someone’s mother or father dies.”

Biden Seeks $400 Billion to Buttress Long-Term Care

Biden Seeks $400 Billion to Buttress Long-Term Care. A Look at What's at  Stake. | Kaiser Health News

There’s widespread agreement that it’s important to help older adults and people with disabilities remain independent as long as possible. But are we prepared to do what’s necessary, as a nation, to make this possible?

That’s the challenge President Joe Biden has put forward with his bold proposal to spend $400 billion over eight years on home and community-based services, a major part of his $2 trillion infrastructure plan.

It’s a “historic and profound” opportunity to build a stronger framework of services surrounding vulnerable people who need considerable ongoing assistance, said Ai-jen Poo, director of Caring Across Generations, a national group advocating for older adults, individuals with disabilities, families and caregivers.

It comes as the coronavirus pandemic has wreaked havoc in nursing homes, assisted living facilities and group homes, killing more than 174,000 people and triggering awareness of the need for more long-term care options.

“There’s a much greater understanding now that it is not a good thing to be stuck in long-term care institutions” and that community-based care is an “essential alternative, which the vast majority of people would prefer,” said Ari Ne’eman, senior research associate at Harvard Law School’s Project on Disability.

“The systems we do have are crumbling” due to underfunding and understaffing, and “there has never been a greater opportunity for change than now,” said Katie Smith Sloan, president of LeadingAge, at a recent press conference where the president’s proposal was discussed. LeadingAge is a national association of more than 5,000 nonprofit nursing homes, assisted living centers, senior living communities and home care providers.

But prospects for the president’s proposal are uncertain. Republicans decry its cost and argue that much of what the proposed American Jobs Plan contains, including the emphasis on home-based care, doesn’t count as real infrastructure.

“Though this [proposal] is a necessary step to strengthen our long-term care system, politically it will be a challenge,” suggested Joseph Gaugler, a professor at the University of Minnesota’s School of Public Health, who studies long-term care.

Even advocates acknowledge the proposal doesn’t address the full extent of care needed by the nation’s rapidly growing older population. In particular, middle-income seniors won’t qualify directly for programs that would be expanded. They would, however, benefit from a larger, better paid, better trained workforce of aides that help people in their homes — one of the plan’s objectives.

“This [plan] isn’t everything that’s needed, not by any step of the imagination,” Poo said. “What we really want to get to is universal access to long-term care. But that will be a multistep process.”

Understanding what’s at stake is essential as communities across the country and Congress begin discussing Biden’s proposal.

The services in question. Home and community-based services help people who need significant assistance live at home as opposed to nursing homes or group homes.

Services can include home visits from nurses or occupational therapists; assistance with personal care such as eating or bathing; help from case managers; attendance at adult day centers; help with cooking, cleaning and other chores; transportation; and home repairs and modifications. It can also help pay for durable medical equipment such as wheelchairs or oxygen tanks.

The need. At some point, 70% of older adults will require help with dressing, hygiene, moving around, managing finances, taking medications, cooking, housekeeping and other daily needs, usually for two to four years. As the nation’s aging population expands to 74 million in 2030 (the year all baby boomers will have entered older age), that need will expand exponentially.

Younger adults and children with conditions such as cerebral palsy, blindness or intellectual disabilities can similarly require significant assistance.

The burden on families. Currently, 53 million family members provide most of the care that vulnerable seniors and people with disabilities require — without being paid and often at significant financial and emotional cost. According to AARP, family caregivers on average devote about 24 hours a week, to helping loved ones and spend around $7,000 out-of-pocket.

This reflects a sobering reality: Long-term care services are simply too expensive for most individuals and families. According to a survey last year by Genworth, a financial services firm, the hourly cost for a home health aide averages $24. Annually, assisted living centers charge an average $51,600, while a semiprivate room in a nursing home goes for $93,075.

Medicare limitations. Many people assume that Medicare — the nation’s health program for 61 million older adults and people with severe disabilities — will pay for long-term care, including home-based services. But Medicare coverage is extremely limited.

In the community, Medicare covers home health only for older adults and people with severe disabilities who are homebound and need skilled services from nurses and therapists. It does not pay for 24-hour care or care for personal aides or homemakers. In 2018, about 3.4 million Medicare members received home health services.

In nursing homes, Medicare pays only for rehabilitation services for a maximum of 100 days. It does not provide support for long-term stays in nursing homes or assisted living facilities.

Medicaid options. Medicaid — the federal-state health program for 72 million children and adults in low-income households — can be an alternative, but financial eligibility standards are strict and only people with meager incomes and assets qualify.

Medicaid supports two types of long-term care: home and community-based services and those provided in institutions such as nursing homes. But only care in institutions is mandated by the federal government. Home and community-based services are provided at the discretion of the states.

Although all states offer home and community-based services of some kind, there’s enormous variation in the types of services offered, who is served (states can set caps on enrollment) and state spending. Generally, people need to be frail enough to need nursing home care to qualify.

Nationally, 57% of Medicaid’s long-term care budget goes to home and community-based services — $92 billion in the 2018 federal budget year. But half of states still spend twice as much on institutional care as they do on community-based care. And 41 states have waiting lists, totaling nearly 820,000 people, with an average wait of 39 months.

Based on the best information available, between 4 million and 5 million people receive Medicaid-funded home and community-based services — a fraction of those who need care.

Workforce issues. Biden’s proposal doesn’t specify how $400 billion in additional funding would be spent, beyond stating that access to home and community-based care would be expanded and caregivers would receive “a long-overdue raise, stronger benefits, and an opportunity to organize or join a union.”

Caregivers, including nursing assistants and home health and personal care aides, earn $12 an hour, on average. Most are women of color; about one-third of those working for agencies don’t receive health insurance from their employers.

By the end of this decade, an extra 1 million workers will be needed for home-based care — a number of experts believe will be difficult, if not impossible, to reach given poor pay and working conditions.

“We have a choice to keep these poverty-wage jobs or make them good jobs that allow people to take pride in their work while taking care of their families,” said Poo of Caring Across Generations.

Next steps. Biden’s plan leaves out many details. For example: What portion of funding should go to strengthening the workforce? What portion should be devoted to eliminating waiting lists? What amount should be spent on expanding services?

How will inequities of the current system — for instance, the lack of accessible services in rural counties or for people with dementia — be addressed? “We want to see funding to states tied to addressing those inequities,” said Amber Christ, directing attorney of the health team at Justice in Aging, an advocacy organization.

Meanwhile, supporters of the plan suggest it could be just the opening of a major effort to shore up other parts of the safety net. “There are huge gaps in the system for middle-income families that need to be addressed,” said David Certner, AARP’s legislative counsel.

Reforms that should be considered include tax credits for caregivers, expanding Medicare’s home health benefit and removing the requirement that people receiving Medicare home health be homebound, said Christ of Justice in Aging.

We should be looking more broadly at potential solutions that reach people who have some resources but not enough to pay for these services as well,” she said.

MedPAC calls for 2% bump to hospital payments, no update for docs in 2022

MedPAC March 2019 Report to the Congress Released - ehospice

A key Medicare advisory panel is calling for a 2% bump to Medicare payments for acute care hospitals for 2022 but no hike for physicians.

The report, released Monday from the Medicare Payment Advisory Commission (MedPAC)—which recommends payment policies to Congress—bases payment rate recommendations on data from 2019. However, the commission did factor in the pandemic when evaluating the payment rates and other policies in the report to Congress, including whether policies should be permanent or temporary.

“The financial stress on providers is unpredictable, although it has been alleviated to some extent by government assistance and rebounding service utilization levels,” the report said.

MedPAC recommended that targeted and temporary funding policies are the best way to help providers rather than a permanent hike for payments that gets increased over time.

“Overall, these recommendations would reduce Medicare spending while preserving beneficiaries’ access to high-quality care,” the report added.

MedPAC expects the effects of the pandemic, which have hurt provider finances due to a drop in healthcare use, to persist into 2021 but to be temporary.

It calls for a 2% update for inpatient and outpatient services for 2022, the same increase it recommended for 2021.

The latest report recommends no update for physicians and other professionals. The panel also does not want any hikes for four payment systems: ambulatory surgical centers, outpatient dialysis facilities, skilled nursing facilities and hospices.

MedPAC also recommends Congress reduce the aggregate hospice cap by 20% and that “ambulatory surgery centers be required to report cost data to [Centers for Medicare & Medicaid Services (CMS)],” the report said.

But it does call for long-term care hospitals to get a 2% increase and to reduce payments by 5% for home health and inpatient rehabilitation facilities.

The panel also explores the effects of any policies implemented under the COVID-19 public health emergency, which is likely to extend through 2021 and could continue into 2022.

For instance, CMS used the public health emergency to greatly expand the flexibility for providers to be reimbursed for telehealth services. Use of telehealth exploded during the pandemic after hesitancy among patients to go to the doctor’s office or hospital for care.

“Without legislative action, many of the changes will expire at the end of the [public health emergency],” the report said.

MedPAC recommends Congress temporarily continue some of the telehealth expansions for one to two years after the public health emergency ends. This will give lawmakers more time to gather evidence on the impact of telehealth on quality and Medicare spending.

“During this limited period, Medicare should temporarily pay for specified telehealth services provided to all beneficiaries regardless of their location, and it should continue to cover certain newly-covered telehealth services and certain audio-only telehealth services if there is potential for clinical benefit,” according to a release on the report.

After the public health emergency ends, Medicare should also return to paying the physician fee schedule’s facility rate for any telehealth services. This will ensure Medicare can collect data on the cost for providing the services.

“Providers should not be allowed to reduce or waive beneficiary cost-sharing for telehealth services after the [public health emergency],” the report said. “CMS should also implement other safeguards to protect the Medicare program and its beneficiaries from unnecessary spending and potential fraud related to telehealth.”

Genesis HealthCare plans to cut $236M in debt, delist stock from NYSE

Genesis Corporate Headquarters | Paul Risk Construction

Kennett Square, Pa.-based Genesis HealthCare will institute a three-pronged restructuring plan to improve its financial metrics and cut debt by $236 million, the company said March 3. 

Genesis HealthCare is a holding company with subsidiaries that provide services to more than 325 skilled nursing facilities and assisted or senior living communities in 24 states. 

As part of its financial improvement strategy, Genesis agreed to end master lease agreements at 51 assisted or senior living facilities leased from Welltower and transition them to new operators. Genesis expects to receive $86 million from the deal, which it will use to repay a portion of its debt obligations to Welltower. 

Genesis will also receive $170 million in debt reduction from Welltower after completing the transaction. 

The company also signed a definitive agreement for a capital infusion of $50 million from ReGen Healthcare, which ups its ownership interest in Genesis to 25 percent.  

The third part of the strategy is that it will voluntarily delist its Class A common stock from the New York Stock Exchange and deregister its common stock under the Securities Exchange Act of 1934.

“The severity of the pandemic dramatically impacted patient admissions, revenues and costs, compounding the pressures of our long-term, lease-related debt obligations,” said Genesis CEO Robert Fish. “These restructuring transactions improve the financial and operational stability of the company significantly and build on the encouraging signs we are seeing as COVID-19 case rates continue to materially decline and residents, patients and staff are vaccinated.”

Risking lives in pursuit of profits

https://mailchi.mp/05e4ff455445/the-weekly-gist-february-26-2021?e=d1e747d2d8

Benefit of Private Equity in Healthcare? Lessons from Nursing Homes

Finding a good long-term care facility for a loved one has always been a difficult process. A new National Bureau of Economic Research working paper suggests that families should also be paying attention to who owns the facility, finding a significant increase in mortality in nursing homes owned by private equity investors.

Examining Medicare data from over 18,000 nursing homes, 1,674 of which were owned by private equity (PE) firms, researchers found that PE ownership increased Medicare patient mortality by 10 percent—translating to a possible 20,150 additional lives lost. PE-owned facilities were also 11 percent more expensive.

Counterintuitively, lower-acuity patients had the greatest increase in mortality. Researchers found staffing decreased by 1.4 percent in PE-owned facilities, suggesting that shorter-staffed facilities may be forced to shift attention to sicker patients, leading to greater adverse effects on patients requiring less care.

Antipsychotic use, which carries a higher risk in the elderly, was also a whopping 50 percent higher.

Nursing homes are low-margin businesses, with profits of just 1-2 percent per year—and PE ownership did not improve financial performance.

Researchers found private equity profited from three strategies: “monitoring fees” paid to services also owned by the PE firm, lease payments after real estate sales, and tax benefits from increased interest payments, concluding that PE is shifting operating costs away from patient care in order to increase return on investment. Private equity investment in care delivery assets has skyrocketed over the past decade.

This study draws the most direct correlation between PE investment and an adverse impact on patient outcomes that we’ve seen so far, highlighting the need for increased regulatory scrutiny to ensure that patient safety isn’t sacrificed for investor returns.

Trump’s pardons included healthcare execs behind massive frauds

At the last minute, President Donald Trump granted pardons to several individuals convicted in huge Medicare swindles that prosecutors alleged often harmed or endangered elderly and infirm patients while fleecing taxpayers.

“These aren’t just technical financial crimes. These were major, major crimes,” said Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, an advocacy group.

The list of some 200 Trump pardons or commutations, most issued as he vacated the White House this week, included at least seven doctors or health care entrepreneurs who ran discredited health care enterprises, from nursing homes to pain clinics. One is a former doctor and California hospital owner embroiled in a massive workers’ compensation kickback scheme that prosecutors alleged prompted more than 14,000 dubious spinal surgeries. Another was in prison after prosecutors accused him of ripping off more than $1 billion from Medicare and Medicaid through nursing homes and other senior care facilities, among the largest frauds in U.S. history.

“All of us are shaking our heads with these insurance fraud criminals just walking free,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. The White House argued all deserved a second chance. One man was said to have devoted himself to prayer, while another planned to resume charity work or other community service. Others won clemency at the request of prominent Republican ex-attorneys general or others who argued their crimes were victimless or said critical errors by prosecutors had led to improper convictions.

Trump commuted the sentence of former nursing home magnate Philip Esformes in late December. He was serving a 20-year sentence for bilking $1 billion from Medicare and Medicaid. An FBI agent called him “a man driven by almost unbounded greed.” Prosecutors said that Esformes used proceeds from his crimes to make a series of “extravagant purchases, including luxury automobiles and a $360,000 watch.”

Esformes also bribed the basketball coach at the University of Pennsylvania “in exchange for his assistance in gaining admission for his son into the university,” according to prosecutors.

Fraud investigators had cheered the conviction. In 2019, the National Health Care Anti-Fraud Association gave its annual award to the team responsible for making the case. Saccoccio said that such cases are complex and that investigators sometimes spend years and put their “heart and soul” into them. “They get a conviction and then they see this happen. It has to be somewhat demoralizing.”

Tim McCormack, a Maine lawyer who represented a whistleblower in a 2007 kickback case involving Esformes, said these cases “are not just about stealing money.”

“This is about betraying their duty to their patients. This is about using their vulnerable, sick and trusting patients as an ATM to line their already rich pockets,” he said. He added: “These pardons send the message that if you are rich and connected and powerful enough, then you are above the law.”

The Trump White House saw things much differently.

“While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,” the White House pardon statement said.

The White House said the action was backed by former Attorneys General Edwin Meese and Michael Mukasey, while Ken Starr, one of Trump’s lawyers in his first impeachment trial, filed briefs in support of his appeal claiming prosecutorial misconduct related to violating attorney-client privilege.

Trump also commuted the sentence of Salomon Melgen, a Florida eye doctor who had served four years in federal prison for fraud. That case also ensnared U.S. Sen. Robert Menendez (D-N.J.), who was acquitted in the case and helped seek the action for his friend, according to the White House.

Prosecutors had accused Melgen of endangering patients with needless injections to treat macular degeneration and other unnecessary medical care, describing his actions as “truly horrific” and “barbaric and inhumane,” according to a court filing.

Melgen “not only defrauded the Medicare program of tens of millions of dollars, but he abused his patients — who were elderly, infirm, and often disabled — in the process,” prosecutors wrote.

These treatments “involved sticking needles in their eyes, burning their retinas with a laser, and injecting dyes into their bloodstream.”

Prosecutors said the scheme raked in “a staggering amount of money.” Between 2008 and 2013, Medicare paid the solo practitioner about $100 million. He took in an additional $10 million from Medicaid, the government health care program for low-income people, $62 million from private insurance, and approximately $3 million in patients’ payments, prosecutors said.

In commuting Melgen’s sentence, Trump cited support from Menendez and U.S. Rep. Mario Diaz-Balart (R-Fla.). “Numerous patients and friends testify to his generosity in treating all patients, especially those unable to pay or unable to afford healthcare insurance,” the statement said.

In a statement, Melgen, 66, thanked Trump and said his decision ended “a serious miscarriage of justice.”

“Throughout this ordeal, I have come to realize the very deep flaws in our justice system and how people are at the complete mercy of prosecutors and judges. As of today, I am committed to fighting for unjustly incarcerated people,” Melgen said. He denied harming any patients.

Faustino Bernadett, a former California anesthesiologist and hospital owner, received a full pardon. He had been sentenced to 15 months in prison in connection with a scheme that paid kickbacks to doctors for admitting patients to Pacific Hospital of Long Beach for spinal surgery and other treatments.

“As a physician himself, defendant knew that exchanging thousands of dollars in kickbacks in return for spinal surgery services was illegal and unethical,” prosecutors wrote.

Many of the spinal surgery patients “were injured workers covered by workers’ compensation insurance. Those patient-victims were often blue-collar workers who were especially vulnerable as a result of their injuries,” according to prosecutors.

The White House said the conviction “was the only major blemish” on the doctor’s record. While Bernadett failed to report the kickback scheme, “he was not part of the underlying scheme itself,” according to the White House.

The White House also said Bernadett was involved in numerous charitable activities, including “helping protect his community from COVID-19.” “President Trump determined that it is in the interests of justice and Dr. Bernadett’s community that he may continue his volunteer and charitable work,” the White House statement read.

Others who received pardons or commutations included Sholam Weiss, who was said to have been issued the longest sentence ever for a white collar crime — 835 years. “Mr. Weiss was convicted of racketeering, wire fraud, money laundering, and obstruction of justice, for which he has already served over 18 years and paid substantial restitution. He is 66 years old and suffers from chronic health conditions,” according to the White House.

John Davis, the former CEO of Comprehensive Pain Specialists, the Tennessee-based chain of pain management clinics, had spent four months in prison. Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.

Trump’s pardon statement cited support from country singer Luke Bryan, said to be a friend of Davis’.

“Notably, no one suffered financially as a result of his crime and he has no other criminal record,” the White House statement reads.

“Prior to his conviction, Mr. Davis was well known in his community as an active supporter of local charities. He is described as hardworking and deeply committed to his family and country. Mr. Davis and his wife have been married for 15 years, and he is the father of three young children.”

CPS was the subject of a November 2017 investigation by KHN that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers.

SOUTH DAKOTA’S CORONAVIRUS SURGE IS TURNING NURSING HOMES INTO A ‘BATTLE ZONE’

https://publicintegrity.org/health/coronavirus-and-inequality/south-dakota-covid-19-surge-nursing-homes-battle-zone/?fbclid=IwAR0Y4-pTgD3JzQN-h-aKHxFGto_qWKC9sXsY4U6gERp-dtKDI_kmccZxBWw

The state has lost a greater share of its nursing home residents to COVID-19 than any other state this fall.

On October 9, an employee in the business office at Tieszen Memorial Home in Marion, South Dakota, tested positive for the coronavirus. She was sent home immediately, but three days later, a nursing aide and a housekeeper both tested positive.

Marion, a town of fewer than 1,000 residents, was experiencing a sharp uptick in cases — what scientists call community spread. It became more and more likely that the nursing home’s employees had become infected while, for example, grocery shopping.

On October 16, COVID-19 killed its first Tieszen resident. At that point, about thirteen of the home’s 55 residents had tested positive.

Nursing home administrator Laura Wilson called the days that followed the worst of her career.

“You almost feel like a battle zone,” she said. “We said, ‘You know, right now, we just need to survive.’”

South Dakota Republican Gov. Kristi Noem has taken a notably relaxed approach to the pandemic. This autumn, months deep into this pandemic, nursing homes there have seen a larger share of their residents die than any other state.

At Jenkin’s Living Center in Watertown, 24 residents have died from COVID-19 since the last week of October — about a fifth of the residents there — data submitted to the federal government show. Thirteen patients at Weskota Manor in Wessington Springs  — more than a third of its patients — died from COVID-19 this autumn, most of them in one week. Walworth County Care Center in Selby, a 50-bed facility, saw COVID-19 kill 12 patients this autumn, an administrator said. Overall, more than 40 percent of South Dakota nursing homes have lost a tenth or more of their patients to the coronavirus, according to a Center for Public Integrity analysis of data from the federal Centers for Medicare and Medicaid Services.

Nationwide, more than 100,000 residents of long-term care facilities have died of COVID-19, making up 38% of the nation’s virus deaths, according to The Atlantics Covid Tracking Project,  even though they represent less than 1 percent of the population. 

The federal government has made protecting the elderly a priority, shipping millions of rapid tests to nursing homes across the country. Public health experts spent the first nine months of the pandemic perfecting strategies to keep the virus from spreading in close quarters. But, as researchers have learned, whether nursing home residents die from COVID-19 depends less on what happens inside than outside. Once COVID-19 permeates a town, there’s a limit to what nursing homes alone can do. 

And that has made South Dakota an especially deadly place.

A LONG STRING OF DEATHS

During Tieszen’s outbreak, the nursing home was eerily quiet. On a normal day, “The Price is Right” might blare from a room, echoing down the hallways. But when the coronavirus hit, all the residents’ doors had to be closed to try to control the spread.

Before October, Tieszen had pandemic challenges but not mass tragedy. Wilson was forced to hunt for N95 masks on eBay, even though South Dakota is home to a 3M factory that makes them. She relied on her son, who works at Sam’s Club, to buy one pack of disinfecting wipes every day for the nursing home’s stockpile. Back when she was using lab-confirmed tests to screen her staff, she had trouble getting test results back within the time recommended by federal guidelines, as the Sioux Falls lab she had contracted with was swamped. And she says, like always, staffing was a problem: Tieszen told the federal government it was short on nurses and aides every week in October and November.

Wilson, who has worked at the nursing home for 42 years, said her staff did everything it could during the outbreak. Indeed, Tieszen, a small nonprofit that has earned five stars in the federal government’s nursing home quality rankings, passed three state inspections of its infection-control program between May and November, records show. It received roughly $70,000 in CARES Act incentive payments from the federal government in September based on good performance.

When the coronavirus hit, the nursing home dedicated two of its wings to COVID-19 patients, isolating them from other residents, until so many contracted the virus that they had to stay in their rooms. The entire nursing home, essentially, became a COVID ward. Wilson’s own 85-year-old father tested positive. Nurses worked overtime; Wilson put in 80-hour weeks and hired temporary help. Staff served residents’ meals on paper plates instead of dishes that might retain the virus. They conducted weekly audits of how often staff were washing their hands. They tested workers and residents at any sign of a sniffle, as well as regularly regardless of symptoms, using equipment shipped to the nursing home from the federal government. They followed up positive rapid test results with lab-confirmed PCR tests.

Despite all of these measures, the virus spread quickly.

The week after Tieszen’s first death on October 16, five more residents died, Wilson said. Among them was 89-year-old Maxine Ortman, a former teacher suffering from dementia whose husband would visit often, before the pandemic, from his home across the street.

The following week, seven more died. 

In November, another seven died. They included 68-year-old Larry Johnson, a diabetic and former mechanic whose sense of humor and work ethic drew customers from all over northeastern South Dakota, his family wrote in his obituary.

And they included Randy Wieman, 64. He had Down syndrome, and died a week after testing positive for the virus, said his older sister, Carol Husby. He loved music, dancing and his many nieces and nephews. A normal December would find them celebrating Wieman’s birthday with chocolate cake. 

“He would call me every morning to ask if I was up,” Husby said. “Randy was an amazing individual.”

In total, 20 residents died of the coronavirus — more than a third of those living at the Tieszen nursing home — in the space of five weeks.

OUT-OF-CONTROL SPREAD

Tamara Konetzka, a health researcher at the University of Chicago, has been studying the fate of nursing homes in the pandemic since the spring.

Her conclusion: “Nothing much has changed.”

Despite more testing and efforts to hone infection control practices, despite nine months of scientific study of the virus, nursing home residents are still at the mercy of their surrounding communities. “If they’re in virus hotspots, they’re going to be at risk,” Konetzka said. “The idea that we have found the secret to preventing nursing home cases and death is a little crazy.”

And this autumn, nearly all of South Dakota has been a hotspot. The state has ranked at or near the top of all 50 states in new coronavirus cases and deaths for months in reports issued to governors by the White House Coronavirus Task Force. During one week prior to Thanksgiving, South Dakota had 988 new coronavirus cases per 100,000 residents — more than double the national average. It had 19.6 deaths per 100,000 residents — the worst rate in the nation and more than six times the national average.

The state’s governor, Noem, is widely believed to have national political ambitions. She has proudly shunned strict measures to curb the virus.
“Rather than following the pack and mandating harsh rules,” she wrote in The Wall Street Journal earlier this month, “we ask all South Dakotans to take personal responsibility for their health …. The state hasn’t issued lockdowns or mask mandates. We haven’t shut down businesses or closed churches.”

South Dakota Republican Gov. Kristi Noem has taken a relaxed approach to the pandemic, shunning strict measures to curb the virus. (AP Photo/James Nord, File)

Many South Dakotans have refused to wear masks or socially distance. In September, Wilson spoke at a meeting of local business owners in Marion and urged them to take mask-wearing seriously. She was met with blank stares. 

“When I left that meeting I had basically resigned myself to the fact that I am living in a different world, and they don’t get it,” she said. “I’d be the only person in the grocery store with a mask on.”

Though limiting community spread is the best way to protect nursing homes, researchers said, some measures — especially having enough staff — can affect the severity of outbreaks. Here is where the federal government failed spectacularly, experts said.
“What they needed — damn it — they needed money for more staffing,” said Larry Polivka, executive director of the aging-focused Claude Pepper Center at Florida State University. “And they needed all of the PPE. They needed massive testing capacity as quickly as possible in the spring — they didn’t get it.”

Wilson said the South Dakota Department of Health was helpful when she called or emailed with questions. The state continued to inspect nursing homes for infection control practices, and just 14 South Dakota nursing homes were cited by inspectors for inadequate infection control between March and October, according to federal data. The state has a program to recruit retired nurses and doctors to help work in healthcare settings. The federal government sent a “strike team” to South Dakota in October to help nursing homes tackle the coronavirus, a spokesman for CMS said in an email, and federal officials have offered training and guidance.

But it’s unclear what else, if anything, South Dakota did to help nursing homes weather the brutal autumn. For nine weeks in October and November, on average, nearly a quarter of all nursing homes in South Dakota told the federal government they were short on nursing staff, far more than the 16 percent that did so nationwide. On average, more than 40 percent of South Dakota nursing homes reported shortages of aides, more than double the nationwide figure. And 13 percent of South Dakota nursing homes during that time reported shortages of PPE — roughly the same as did nationwide. 

Policymakers of all stripes, even those who embrace a controversial “herd immunity” strategy and wish the virus to run free through the population, stress the need to protect long-term-care residents. Noem has not explicitly endorsed a herd immunity approach but has emphasized that the coronavirus is less likely to harm young people. She has acknowledged that the elderly face greater risks from the coronavirus. 

Yet the governor’s spokesperson did not answer questions from the Center for Public Integrity regarding nursing homes or respond to requests for comment. Noem’s health secretary did not respond to a request for an interview. The South Dakota Department of Health declined to answer multiple emails sent by Public Integrity over multiple weeks. The state’s long-term-care ombudsman refused through an agency spokesman to answer questions. When pressed, the spokesman said he did not know the reason but was given orders to decline the interview.

Even supposed advocates for nursing homes are reluctant to speak about the toll the coronavirus is taking on South Dakota’s elderly. Two trade associations representing nursing homes in the state declined interviews. One of them, the South Dakota Health Care Association, recommended that a reporter speak to the state department of health instead. Another lobbyist, who wished to remain anonymous to avoid angering the Noem administration, said people fear upsetting the governor’s office, known for its guarded approach to dealing with the media.

The state also waited until September to decide how to spend nearly $600 million in CARES Act funding approved by Congress in March. Noem finally set aside $115 million for nursing homes and other local health providers. But nursing homes had to apply for the funding during an 11-day period in October and meet strict qualifications. Tieszen applied but was not granted funds. Documents from the South Dakota Legislature dated Dec. 7 show that 115 health care organizations applied for the funding, and 47 were approved. But just $1.9 million had been handed out as of Dec. 18. The state is now proposing another grant program to distribute the money to health organizations based on bed numbers.

But for many nursing homes, the money comes too late to save lives. South Dakota may be past the worst of this COVID-19 surge. New coronavirus cases in the state are on the wane; vaccines are perhaps weeks away for nursing home residents at Tieszen and elsewhere.

All told, the state lost roughly one out of every 10 nursing home residents to COVID-19, according to federal data. 

“I don’t understand why people didn’t take it seriously right from the beginning,” Husby said. “It just breaks my heart because it didn’t have to be this way.”

Despite clemency, healthcare exec seeks dismissal of $43M in penalties

Philip Esformes' Sentence Commuted, Others Pardoned By President Trump

A Florida healthcare executive is appealing $43 million in financial penalties after President Donald Trump commuted his 20-year prison sentence in December, according to law.com

Philip Esformes, who operated a chain of skilled nursing facilities and assisted living facilities in Florida, was sentenced Sep. 12 to 20 years in prison. The sentencing came roughly five months after a 12-person jury found him guilty of more than 20 charges, including paying and receiving kickbacks, money laundering and bribery. He was convicted after an eight-week trial for his role in a $1.3 billion Medicare and Medicaid fraud case. 

President Trump in late December commuted Mr. Esformes’ prison sentence. The communication left other aspects of his sentence intact, including restitution. 

Mr. Esformes still must forfeit $38 million and owes about $5 million in restitution, according to McKnight’s Senior Living. In the appeal of the financial penalties, lawyers cite the federal government’s “inability to show a single instance of fraudulent billing,” according to the report.