White House ready to crack down on nursing homes, cites USA TODAY report

By Nick Penzenstadler,Letitia Stein and Jayme Fraser

Health policy advisers to President Joe Biden cited a USA TODAY investigation into nursing home care during the pandemic as evidence of a troubled industry urgently in need of reform to crack down on poor performers and profiteering.

The report, released last week, showed that residents at a single Midwest chain with 115 campuses died of COVID-19 last winter at twice the national average for nursing homes, based on figures facilities must file weekly with the federal government. Presented with USA TODAY’s findings, the company said it overreported hundreds of deaths during the surge.

Trilogy is a for-profit company backed by a real estate investment trust, a health care investment strategy until now operating largely under the radar of federal nursing home regulators. The White House hopes to shed light on the various ways Wall Street profits from taxpayer-funded health care for the elderly and people with disabilities. 

Investigation:This nursing home chain stood out for nationally high death rates as pandemic peaked

Greater financial transparency is part of a sweeping set of proposals Biden unveiled as part of the State of the Union speech March 1. He also called for increased reporting on for-profit nursing home ownership, including REITs and private equity; minimum staffing standards; a database to track back operators across state lines; and stiffer violation penalties.

Trilogy’s investment company is based in Southern California, but its nursing homes span four Midwestern states – Indiana, Kentucky, Ohio and Michigan. The federal Centers for Medicare and Medicaid Services acknowledged that it focused on the performance of individual nursing homes, not looking more broadly at chains, during the pandemic.

"We are actively looking to improve," Jonathan Blum, principal deputy administrator at the CMS, said in an interview in January.

Senior Biden administration officials, speaking on condition of anonymity during negotiations with departments, expressed concern that some operators may be siphoning money from the federally funded nursing homes at the expense of patient care. 

They told USA TODAY that they are working on the reforms through the Department of Health and Human Services and its Centers for Medicare and Medicaid Services. Some changes can be enacted through administrative action after a rulemaking process, but others will require legislation passed by Congress. 

Officials said the industry should expect the changes in “weeks and months,” not years. 

The White House wants to enforce an Affordable Care Act provision that requires ownership information for any nursing home entity with a 5% or larger share to be reported to the federal government. Officials want to make that information easier to find on a government website, where consumers can look up quality ratings on a facility for a loved one. 

As part of its investigation published last week, USA TODAY scored more than 15,000 nursing homes based on their performance during last winter’s COVID-19 surge and presented the results in a new look-up tool.

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Nursing homes owned by major chains in 2020-21 USA Today

Database:See how they fared during COVID-19's winter surge, 2020-21

Biden seeks a $500 million increase in CMS funding to augment nursing home inspections and wants to raise the cap on penalties for poor-performing facilities, from $21,000 to $1,000,000 – both of which will require congressional action.

Nursing advocates and AARP’s Rhonda Richards, senior legislative representative in government affairs, applauded the proposal “to better protect seniors.”

For-profit and nonprofit nursing home lobby groups oppose the measures, saying Medicaid funding falls short in reimbursing nursing care. “Regulations and enforcement, even with the best intentions, just can’t change that math,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement.

Another industry group called for a meeting with Biden and HHS Secretary Xavier Becerra, in a letter released last week.

American Health Care Association President Mark Parkinson took issue with the president’s rhetoric around the announcement and cracking down on bad actors, which he said “demoralized an already beaten down sector” and disregards “the heroic sacrifices” of nursing staff. 

“We are particularly shocked by statements regarding the COVID-19 pandemic, placing blame on nursing home caregivers and criticizing the care provided,” Parkinson wrote.

In an op-ed to USA TODAY, AHCA’s David Gifford, a geriatrician, and the group's chief medical officer wrote, “It’s time we stop placing blame on nursing homes for a once-in-a-century global pandemic.”

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Residents from St. Josephs Senior Home are helped on to buses in Woodbridge, N.J., on March 25, 2020. More than 90 residents of the nursing home were transferred to a facility in Whippany after several testes positive for the coronavirus. Seth Wenig/AP

Opinion:Don't blame nursing homes for the deaths of residents in a pandemic

The association criticized Biden’s proposed minimum staffing requirements – a move that doesn’t require congressional action and could hit the industry’s bottom line. 

Congress debated a bill that would mandate the minimums, which stalled. White House officials said Biden will attempt it via a new administrative policy that will require a rulemaking process.

The officials said that although the industry is understandably fearful about what it sees as a payment cut, the government is more concerned about maintaining minimum care standards. 

“Having adequate staffing is important to avoiding nursing staff burnout,” one administration official said this week. “(The USA TODAY) piece had some moving and heart-wrenching things with staff at their wits' end because they were so short-handed. This will help, not hurt, on the burnout side of things.”

Nick Penzenstadler is a reporter on the USA TODAY investigations team. Contact him at npenz@usatoday.com or @npenzenstadler, or on Signal at (720) 507-5273.

[This article was originally published by USA Today.]

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