Press Room
News Stories
Nursing homes across the U.S. receive bonuses despite violations
By CLARK KAUFFMAN
Des Moines Register
November 9, 2008
Nursing homes throughout the country are eligible for hundreds of millions of dollars in taxpayer-funded bonuses despite past violations of basic health-and-safety standards.
A Des Moines Register review of 81 bonus payment programs in 36 states shows that some homes are collecting quality-of-care bonuses approved by the same federal agency that considers them to be below-average caregivers.
In addition, more than 60 bonus programs exist to help nursing homes do what they are legally required to do, such as pay the minimum wage or install fire sprinklers for resident safety.
The total cost to taxpayers is unknown, according to the Centers for Medicare and Medicaid Services, which approves and helps fund each of the bonus-payment programs now in effect but does not track any of those payments.
Iowa's bonus program, now six years old, was one of the first in the nation. It placed greater restrictions on bonus payments this year.
The Register examined eight bonus programs in the seven states where recent regulatory violations don't disqualify a home from receiving a bonus that is touted as being directly related to quality care. Those eight programs - which represent just one-tenth of all the bonus programs nationally - are costing taxpayers $312 million per year.
For example, the Grace Living Center in Norman, Okla., has earned almost $96,000 in bonuses during the past year and is considered a "five-star" nursing home by the state of Oklahoma. But federal records show the home has been cited for more violations than the state and national averages. Also, Medicare itself ranks the home below average on 11 of 19 national quality measures.
As the Register reported earlier this year, 16 of 23 Iowa homes hit with major fines last year qualified for bonuses from Iowa's Medicare-Medicaid program. Two of the homes that earned bonuses were on a federal list of the worst nursing homes in the nation, and a third had faced the threat of having its license pulled because of substandard care.
After the Register article was published, Iowa officials began revising their program.
"This is preposterous," said Toby Edelman of the nonprofit Center for Medicaid Advocacy. "The government seems to be saying, 'Yes, we're going to impose fines for poor care, but at the same time we're going to be giving you bonuses.' It just doesn't make any sense. It's totally confusing to consumers."
Susan Feeney of the American Health Care Association said the bonuses help bridge the gap between a nursing home's actual costs and the amount of money Medicaid and Medicare provide to pay for resident care. She said that on average, homes are spending $13 more on each resident each day than what Medicaid is willing to pay.
A nursing home in Eufaula, Okla., is among the hundreds now enrolled in that state's bonus program, which is expected to cost state and federal taxpayers $12.9 million this year. That home scored a zero, on a scale of one to five, for compliance with state and federal regulations. But Oklahoma's Focus on Excellence program has deemed the facility a "three-star" home and awarded its owners a $50,000 bonus.
Mary Kahn, a spokeswoman for the federal government's Centers for Medicare and Medicaid Services, said the law does not require - and thus the agency cannot require - that Medicaid-funded bonuses be linked to quality of care.
"We approve, up front, a state's plan to pay incentive payments to their nursing facilities through Medicaid, but we do not have the authority to dictate how they determine what those payments are or what criteria they use to make them," Kahn said.
The head of CMS, Kerry Weems, wrote in a recent letter to Iowa Sen. Charles Grassley that fines and sanctions for substandard care typically have no bearing on the bonus programs in various states.
"State enforcement programs are generally not linked to payment for services," Weems told Grassley.
Weems pointed out that CMS is proposing a pay-for-performance plan that would tie some federal grants to a care facility's compliance with minimum standards of care. But that plan, he said, has yet to be approved.
66 bonus programs tied to operating costs
Of the 81 bonus programs now operating in 36 states, 15 are considered by the federal government to be related to quality of care.
The 66 other bonus programs are designed not to promote quality of care, but to reward efficiency or encourage certain types of services. In some cases, the money is to be used to offset certain expenses, such as property taxes, fire sprinklers, increases in the minimum wage or staff-recruitment programs.
Only two of those 66 bonus programs tie bonus eligibility to compliance with minimum health-and-safety standards.
Among the programs is one in Louisiana that gives nursing home owners cash for installing legally mandated fire sprinklers. Kent Bordelon of the Louisiana Department of Health and Hospitals said the payments are viewed as a fair way of reimbursing the homes for fire-protection measures that state legislators insisted upon.
"Once we required them to do it, we were forcing an expense on them," Bordelon said. "Now, granted, it was an expense for something they needed to do. You don't want a building burning down and taking patients with it. But it was going to cost them. And the way we were set up before, there would have been no reimbursement for that cost."
The fire-safety payments are expected to cost taxpayers about $450,000 per year, he said.
In Missouri, nursing homes are eligible for nine separate bonus programs, two of which are intended to offset the owners' cost of paying the legally mandated minimum wage. In Rhode Island, homes can qualify for bonuses by improving their energy efficiency.
And in New York, nursing homes can collect bonus money to offset the costs associated with criminal background checks on caregivers and other workers. The payments for background checks total $12.8 million per year.
New York also pays bonuses to nursing homes for staff recruitment and retention programs. Those bonuses total $131 million annually.
Iowa revises program after Register report
Iowa's bonus program was initiated six years ago, and was one of the first of its kind.
But even when it was launched, state officials were reluctant to publicize it for fear that seniors and their families would think that the homes with the largest bonuses were providing the best care. Although the program was authorized under a federal law that allows bonuses for homes that provide "the highest quality care to residents," Iowa's program was designed to award bonuses for achievements that either had no effect on quality or had a negative effect on quality.
For example, Iowa homes could score points toward a bonus by having a high percentage of Medicaid-dependent residents - a trait that has been shown to have an inverse effect on the quality of care.
Also, there were no restrictions on bonuses paid to homes that had been recently fined for abuse or neglect.
As a result, Iowa homes that faced major sanctions from the state for poor resident care quietly collected bonus money that in some cases more than offset the cost of the fines.
Other states quickly began creating their own bonus programs. Many of them were given names that implied a new pay-for-performance approach to improved resident care. In New Hampshire, the program was dubbed the Medicaid Quality Incentive Payment. State officials now acknowledge the program includes no incentives and no quality measures. But the program was based on a new tax imposed on nursing homes, and political leaders wanted a name that spoke to quality rather than taxation.
"The title was just a euphemism to avoid the word 'tax,' " said Jonathan McCosh of the state's Department of Health and Human Services. "There are no quality benchmarks."
The bonus programs didn't attract much attention until March of this year when the Register reported that Iowa's program was providing bonuses to some of the worst homes in the state.
The Register's analysis of the Iowa program shows that of 23 homes fined $10,000 or more in 2007, 16 qualified for bonuses in 2008. Among them: Muscatine's Lutheran Home Society care facility, which was fined $7,000 for dozens of alleged health and safety violations. The home's license was placed on restricted status; federal officials imposed additional fines, and Medicaid funding for new residents was temporarily cut off. Even so, the owners of the home qualified for $115,188 in taxpayer-funded bonuses in 2008.
After the Register's article was published, Grassley wrote to the federal Centers for Medicare and Medicaid Services, saying he found the newspaper's report "very disturbing." He asked for information on other bonus programs throughout the nation.
Iowa, meanwhile, began revising its program and cut the total payout by 23 percent. As it stands now, homes that have recently caused "actual harm" to Iowa seniors are to receive smaller bonuses, while homes that have put residents in "immediate jeopardy" of death or injury are ineligible for bonuses. Iowa homes that have widespread problems resulting only in potential harm, rather than actual harm, will continue to qualify for bonuses.
Dana Petrowski, the head of an industry trade group called Iowa Association of Homes and Services for the Aging, says the organization opposes the new restrictions in part because homes that score well on many measures might now be denied a bonus for a single regulatory violation stemming from an unpreventable accident.
"You can go through all the steps to earn points and then all of your best efforts are washed away because the Department of Inspections and Appeals comes in and (finds that) one person fell down," she said. "It's ridiculous."
She said the program now has the effect of penalizing Iowa's better homes: All homes are fined equally for violations, but the better homes that would otherwise qualify for a bonus take an additional hit through the loss of bonus money.
"It's a double whammy for the good facilities," she said. "The bad facilities don't even get these points."
The revised program retains some of the more controversial elements of the original program: Homes can continue to score points toward a bonus by having a high percentage of Medicaid-dependent residents. And the program still grades homes on a curve, with points awarded for above-average performance. So even if the performance of all Iowa homes declines in a year, the owners of those facilities will collect the same overall amount of bonus money from taxpayers.
Today, the Iowa program seems to have little support. The nursing home industry complains that it penalizes Iowa's best homes, and federal officials say such programs don't really link pay to performance.
Even so, the bonuses aren't going away.
A year ago, administrators at the Iowa Department of Human Services tried to kill the program, arguing the state shouldn't be paying nursing homes extra money to do what was expected of them. The budget the department recommended included no funding for nursing home bonuses.
This year, DHS officials aren't putting up a fight. They've proposed a budget with $6.1 million in bonus money.
"We were quite clear where this agency stood last fall," said department spokesman Roger Munns. "That position was made clear, and it didn't win the day. ... At some point, you have to say, 'Well, this is OK. We've made our point clear.' "
Legislation approved earlier this year says the bonuses will continue at least through June 2009.
State programs
Seven states that give bonuses to nursing homes with violations
According to the Centers for Medicare and Medicaid Services, nursing homes with violations of health-and-safety regulations can still qualify for quality-related bonuses from taxpayers in seven states. Those bonus payments cost state and federal taxpayers more than $312 million per year. Here's a look at each of the seven states and the annual cost of the bonus payments:
IOWA: The state's Accountability Measures Adjustment program is expected to cost taxpayers $6.1 million this year. Homes that have no regulatory violations score additional points toward a bonus, but homes with violations can still qualify for a bonus by scoring well on other criteria.
KANSAS: The state's Nursing Facility Quality and Efficiency Incentive program is expected to provide nursing homes with an additional $2.2 million this year.
MICHIGAN: The state's Quality Assurance Assessment program provides care facilities with $512 million each year. Some of that money comes from the state rebating taxes paid by the homes. The net gain to the homes is $202 million.
MISSOURI: $54.1 million is the total annual spending on two bonus programs, the Quality Assurance Incentive and the Quality Improvement Adjustment.
NEW HAMPSHIRE: The state's Medicaid Quality Incentive Payment provides nursing homes with $69.4 million each year. Some of that money comes from the state rebating taxes paid by the homes. The net gain to the homes is $34.7 million.
OKLAHOMA: The state's Focus On Excellence program provides nursing homes with an additional $12.9 million annually.
RHODE ISLAND: The state's Quality of Care and Cost Incentive program gives all nursing homes with ventilator beds and a respiratory therapist a total of $303,454 annually.
|
|
