Texas nursing homes use loophole to get additional funding

DALLAS—A special state program aimed at attracting additional federal money for government-nursing homes will bring an extra $69 million to Texas facilities this year, with more to come next year.

But owners of for-profit homes have found a way to also get federal dollars intended for only those nursing homes funded by local tax revenue. The for-profits need only partner with hospital districts to get the additional federal Medicaid money.

State officials say this part of the program’s rules are flawed and need to change.

“We’re going to be looking to change this program,” said Chris Traylor, chief deputy commissioner of the Texas Health and Human Services Commission.

Any changes won’t happen until late next year, meaning dozens of private operators can watch as millions in federal dollars come their way.

The Dallas Morning News reports the nursing homes don’t even need to be within a district’s boundaries.

State officials watched as more than 300 privately owned nursing homes in the past year alone became holdings of public hospital districts and hospital authorities.

These actions happened for the sole purpose of attracting the Medicaid supplements. This additional federal money was intended to improve patient care. But no mechanism has been put in place to enforce that.

Texas failed to require that the funds be spent on patients or improvements, no matter how poor a nursing home’s record. Much of the money, therefore, will flow to the original private operators to spend as they please.

Ninety-four counties and hospital districts or authorities across the state—most of them small—have signed up for the new payment program. They hold licenses to 357 nursing homes; all but 30 of those were formerly private, according to the state commission’s figures.

The Dallas County Hospital District, which operates Parkland Memorial Hospital, is obtaining licenses for 12 nursing homes.