House Committee holds hearing on concerns about nursing home ownership, inspections

May 19 2008

The House Energy and Commerce Oversight and Investigations Subcommittee on Thursday held a hearing to examine the effects that the "increasingly veiled nature" of nursing home ownership and problems with inspections have had on the quality of care for elderly and disabled residents, CQ HealthBeat reports (Reichard, CQ HealthBeat, 5/15).

According to CongressDaily, more than 50% of nursing homes are part of chains, with many of those owned by private equity firms that establish "layered entities" to operate the facilities, "making it difficult" for CMS, states and consumers to determine their owners and operators (Cox, CongressDaily, 5/16).

At the hearing, Lewis Morris, chief counsel to the Inspector General for HHS, said that CMS operates a database called "Pecos" that includes some nursing home ownership information but added that the system does not address the issue adequately. The database includes ownership information on 70% of the nursing homes that participate in Medicare, according to acting CMS Administrator Kerry Weems. He said that CMS seeks to "populate Pecos 100%" and link ownership information to quality data on the Nursing Home Compare Web site but added that the agency must have "usable" ownership information (CQ HealthBeat, 5/15).

Subcommittee Chair Bart Stupak (D-Mich.) said, "CMS and the states lack the tools ... to know who actually owns the country's nursing homes and who should be held accountable for the residents in their care." Subcommittee ranking member Joe Barton (R-Texas) said, "A bright dose of sunshine into nursing home practices may be needed to expose offensive acts and discourage bad behavior" (CongressDaily, 5/16).

Inspections

The hearing also addressed problems with nursing home inspections. Morris said that, based on data from 2006, one in five nursing homes has serious deficiencies that result in injuries to residents or place them at risk for injuries (CQ HealthBeat, 5/15).

According to a Government Accountability Office report released at the hearing, from 2002 to 2007, federal officials found that state inspectors had missed at least one serious deficiency at nursing homes in 15% of the inspections they checked. In nine states -- Alabama, Arizona, Missouri, New Mexico, Oklahoma, South Carolina, South Dakota, Tennessee and Wyoming -- federal officials found that state inspectors had missed at least one serious deficiency at nursing homes in 25% of the inspections they checked.

In response to the problems, Sens. Chuck Grassley (R-Iowa) and Herb Kohl (D-Wis.) have introduced a bill that seeks to improve nursing home care. The legislation, which the senators hope to attach to a Medicare bill, would increase fines for violations of federal standards at nursing homes. Under the bill, nursing homes would have to pay $25,000 for serious deficiencies, compared with $10,000 currently, and $100,000 for serious deficiencies that result in the deaths of patients. In addition, the legislation would require nursing homes to provide consumers and the government with more information about ownership and "affiliated or related parties" (Kaiser Daily Health Policy Report, 5/15). Reps. Pete Stark (D-Calif.) and Jan Schakowsky (D-Ill.) plan to introduce similar legislation in the House (CongressDaily, 5/16).

The GAO report is available online.