Should state’s nursing homes be told how to spend money from government?
Last winter, as the coronavirus was still tearing through Connecticut’s nursing homes, lawmakers introduced a raft of legislation aimed at making the facilities safer.
A few key bills succeeded – measures that permit the use of cameras and other technology in nursing homes so families can keep an eye on their loved ones; that allow residents of long-term care facilities to designate an “essential support person” who may enter a nursing home in spite of visitor restrictions; and that increase the minimum required staffing hours to three per resident each day, up from 1.9, even though most facilities already meet or exceed the threehour benchmark.
In three neighboring states, however, leaders enacted even more drastic reforms. New York, New Jersey and Massachusetts adopted policies setting requirements for how much nursing homes must spend on resident care and limiting what they can spend on other expenses, such as administrative costs and salaries.
In New York, nursing homes must spend at least 70 percent of their revenue (from Medicaid, Medicare and private payers) on care for residents, starting next year. At least 40 percent of that must go toward staffing for direct care.
Massachusetts’ edict requires nursing homes to apportion 75 percent of their revenues for resident care, and a mandate in New Jersey compels those facilities to spend 90 percent on resident care, though regulators have suggested that the rule apply only to Medicaid revenue.
The states’ requirements mark the first time that nursing homes have been told how to spend money from the government and residents, according to Kaiser Health News. The mandates are intended to ensure residents receive the care they need and to reduce breaches of quality standards.
In Connecticut, advocates are watching those policies play out, and some are recommending that similar reforms be taken up here when the legislature convenes in February.
“Not everyone puts the residents’ needs first. Many do, but not everyone,” said Mairead Painter, the state’s long-term care ombudswoman. “Making that the priority, I think, is essential.”
“Often, you’ll see money going out for management fees and rent, things like that,” she said. “And it’s disproportionate to the hands-on care.”
Anna Doroghazi, associate director of advocacy and outreach for the AARP in Connecticut, said her organization supports introducing a bill here that would dictate percentages to be spent on resident care, with 70 percent being “a good floor” to consider.
“At the end of the day, we count on nursing homes to provide a certain level of care. And if we can ensure that the care is provided by better targeting the money that goes into nursing homes, we should do that,” she said.
“We owe older residents and disabled people the care that they deserve, especially because so much of what’s paying for that care is taxpayer money.”
Medicaid covers the cost of about 70 percent of all nursing home care provided in Connecticut, while Medicare covers about 15 percent.
Nursing home leaders say they are opposed to any such edict. They point to what they believe are already good measures for accountability in spending – including annual cost reports that facilities are required to file with the state (which feature revenue, expenditure and balance sheet information) and cost caps that restrict how much money nursing homes can receive to pay for various expenses, such as direct and indirect care; administrative costs linked to maintenance and operations; rent; and capital charges. The cost caps are intended to limit excessive payments.
Additionally, the state Department of Social Services conducts
annual audits of nursing home spending. All for-profit facilities must also file profit-and-loss statements from related parties that receive $50,000 or more from the nursing homes.
“The cost caps, the reporting system, the limitations on related parties and the lack of any evidence … that excessive profiteering is going on in Connecticut’s system just don’t set up in a way where this becomes the answer,” said Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, which represents 145 of the state’s 209 nursing homes.
Mag Morelli, president of LeadingAge Connecticut, which represents many of Connecticut’s nonprofit nursing homes, praised the state’s existing cost-control measures.
“It’s not like our rate-setting system is uncontrolled,” she said. “The state has a record on a yearby-year basis of how you’re spending your Medicaid money.”
Barrett said imposing such a rule would have unintended consequences.
For example, severely restricting what nursing facilities can spend on capital improvements could have an impact on residents’ quality of life. If a nursing home needs a new heating, ventilation and air conditioning system, they might be unable to purchase it.
State Rep. Jonathan Steinberg, a co-chair of the legislature’s Public Health Committee, said, lawmakers have not ruled out raising a bill that would dictate a percentage to be spent on direct care, but more analysis is needed.
In New Jersey, Long-Term Care Ombudswoman Laurie Brewer supported the state’s new mandate requiring a percentage of revenue be used for resident care.
“It seems like a no brainer, right? You want most of the money to go towards caring for the people. That’s why you exist,” she said. “But there’s a reason why big corporations and hedge fund managers are interested in long-term care. There’s a massive amount of public funding that goes into long-term care.”