How the Affordable Care Act Can Curb Nursing Home Neglect

Florida’s former nursing home ombudsman says Obamacare just might save grandma, grandpa, us.

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Duane Michelson, 90, and his daughter Darla Shultz, 49, watch television in Independence, Iowa. (Photo: Jessica Rinaldi/Reuters)

Matt Fleischer was awarded a Fund for Investigative Journalism grant for his series “Dangerous Jails.”

The Supreme Court currently has the fate of the Affordable Care Act (otherwise known as Obamacare) in its hands. A decision on the bill’s constitutionality—which could void the act in its entirety—is expected by the end of the month.

In the media coverage of the impending decision, much of the hype focuses on the “individual mandate,” which forces uninsured Americans to buy private health insurance or pay a penalty. One assumption among the American punderati seems to be that young, healthy uninsured individuals are the only ones with a stake in this game.

“Staffing is the key to all of this,” says Lee. “That’s the secret to quality care. But nursing homes would rather cut the front line staff to maximize profit.”

Grandma and grandpa, goes the conventional wisdom, are already taken care of by Medicare. So seniors will be largely unaffected if Obamacare were to be repealed.

Not true.

A little-discussed but extremely important provision of the Affordable Care Act targets deadbeat nursing homes providing substandard care to seniors. The act empowers state ombudsmen to demand nursing home companies make the details of their elaborate corporate structures public.

How this benefits seniors isn’t exactly intuitive. So TakePart spoke with Brian Lee, the former Long Term Care Ombudsman for the state of Florida, for clarification. (Lee now heads the nursing reform advocacy group Families for Better Care.)

According to Lee, in order to understand the new nursing home accountability provisions, you need a primer on how the nursing home industry works.

A great number of players in the senior health care business run a shell game that operates like this: Massive nursing corporations create an elaborate maze of subcontractors and limited liability corporations in an effort to hide profits. In one such scheme, a nursing home conglomerate will buy a nursing facility and subcontract the task of running that facility to an LLC that it also owns.

The conglomerate will change “rent” on each bed the LLC operates. The LLC will then run a bare-bones operation, with as small a staff as possible, often resulting in an atrocious performance record. To look at its books, the nursing home would appear to be struggling financially, justifying the need to cut staff. In reality, the profits from the “rent” are flowing upward, straight to corporate executives and shareholders.

“Staffing is the key to all of this,” says Lee. “That’s the secret to quality care. But nursing homes would rather cut the front line staff to maximize profit.”

Lee’s contention, and the rationale behind the nursing home provision of the Affordable Care Act, is that if these complicated corporate structures are made public, nursing home corporations swimming in profits can no longer hide behind their maze of LLCs.

The hope is that once state politicians are made fully aware of the true nature of nursing home profitability, they will legislate higher staffing levels at nursing homes, ensuring better care. Transparency should also make it easier for abused and neglected nursing home residents to sue the companies that are guiding staffing decisions and profiting from them—rather than sue the cash-poor front companies, which are designed to be disposable.

“I’ve seen more neglect in my lifetime than anyone ever should: Elderly people beaten, slapped around, dehydration, bed sores,” says Lee. “There’s no end in sight unless nursing homes are accountable with their money. And the way to do that is through transparency.”

Unfortunately, Lee’s tenure as an agent of transparency in Florida didn’t last long. In the year after the passage of the Affordable Care Act in 2010, he revealed the corporate lineage of 15 of Florida’s 682 nursing homes. Politically connected nursing home industry lobbyists are believed to have pressured Florida Governor Rick Scott to maneuver Lee’s forcible resignation in February of 2011. Lee’s currently suing the state for wrongful termination.

“To my knowledge, I’m the only ombudsman who has attempted to utilize the new powers of the Affordable Care Act,” he says.

Even though the law hasn’t been widely used, and those who attempt to use it may well face the same political repercussions Lee did from the powerful nursing industry, Lee still feels the provision is an essential tool to guiding reform.

“I think the law has the teeth it needs,” he says. “This is an opportunity to ensure residents get better care.”

If the Supreme Court voids the Obama’s health care law in its entirety, however, hope for that transparency is lost.

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