Friday, November 14, 2014

Part 3: California falls short in disclosing nursing-home ownership

Charlene Harrington

Last of three parts.

Ten years ago, Pat McGinnis took the state of California to court.

As head of California Advocates for Nursing Home Reform, McGinnis was peeved that state officials failed to follow the law and collect complete and accurate nursing-home ownership information. What the state did collect, her group charged, was “often outdated and so poorly organized” it was virtually inaccessible to the public.

The advocacy group won its lawsuit, but the fight was not remotely over.

Today, McGinnis’ group is back in court with a new complaint about how the Department of Public Health is overseeing the complex, multilayered nursing-home industry in California. And she is spitting mad over what she calls the department’s “contempt” in keeping its promises to ferret out and fully disclose the identities of California’s nursing-home owners.

“The state doesn’t know who the hell owns nursing homes,” said McGinnis, CANHR’s executive director.

“They haven’t done diddly-squat.”

The lawsuits, along with tense legislative hearings this year and harsh reports, reflect a growing discontent with how the state regulates nursing homes.

California has more nursing homes than any other state, and one of the country’s highest percentages of facilities owned by for-profit interests. Yet, as more private investment groups acquire skilled-nursing facilities, and ownership structures grow ever more layered and complex, the department has not kept pace with industry changes to help consumers evaluate chains – or even to identify the principals behind them.

The state says it does assemble ownership information turned over by companies, and that the law requires owners to report any changes. A spokesman for the Department of Public Health acknowledged that this detailed ownership information is not included on the public website, but said it is available upon request.

The convoluted nature of nursing-home ownership – often a tangle of interrelated limited liability companies and partnerships – has confounded other state agencies charged with oversight.

The Department of Health Care Services, for instance, which audits all nursing homes that receive Medi-Cal money, recently stated in court documents that auditors had never seen a complete list of facilities owned by the state’s largest nursing-home owner, Shlomo Rechnitz of Los Angeles, until March of this year.

The federal government also has stumbled in its efforts to increase nursing-home transparency, though officials recently announced changes to help consumers find quality care.

At the heart of the issue is a problem Charlene Harrington, an academic researcher and registered nurse, has been hammering on for years: getting regulators to monitor the performance of nursing-home chains – not just individual homes.

“They need to be focusing at the chain level,” said Harrington, professor emerita of sociology and nursing at the University of California, San Francisco, who has researched the nursing-home industry for more than three decades.

“These (facilities) are micromanaged at the chain level,” she said. “The problems usually exist throughout the chain.”

Data still incomplete

In California, the complex ownership structures of many nursing-home companies – and the resulting lack of transparency for consumers – is a matter state lawmakers resolved years ago.

Or so they thought.

In 1997, the Legislature began requiring the Department of Health Services (now the Department of Public Health) to collect “accurate and up-to-date” ownership information on nursing homes, and to make it readily available to the public.

Fed up by a lack of progress, McGinnis’ San Francisco-based advocacy group took the state to court in 2004 and forced officials to sign an agreement two years later saying they would follow the law. Among many things, the department agreed to list the names and addresses of each person having a beneficial ownership interest of 5 percent or more. And, the state agreed to provide the names and addresses of parent organizations, if the nursing home was a subsidiary.

A decade later, the department’s online “Health Facilities Consumer Information System,” which allows viewers to look up individual nursing homes, falls short of these requirements. The listed data remain incomplete and frequently misleading.

In entry after entry, the confusing nature of many nursing-home organizations plays out on the state’s website. The names of many well-known parent companies are missing from the site, and there is no attempt to catalog identities of owners with more than a 5 percent stake. Some of the state’s largest nursing-home chains – including Plum Healthcare and Mariner Health Care Management Co. – are nowhere to be found in the public database.

For instance, a consumer trying to research the Sea Cliff Healthcare Center in Huntington Beach would see on the state’s website that the licensee is HB Healthcare Associates LLC.

What the consumer wouldn’t learn is that the facility’s parent company is The Ensign Group Inc., a publicly traded national chain based in Mission Viejo. In a highly publicized case, the corporation agreed last year to pay $48 million to the federal government to resolve allegations that six of its Southern California facilities had knowingly submitted inflated Medicare bills for therapy services that were medically unnecessary or never provided. The company denied wrongdoing in the case.

Want to know more about Saylor Lane Healthcare Center in Sacramento? According to the state’s website, the licensee of that Folsom Boulevard nursing home is S.L.H.C.C. Inc., a for-profit corporation. What the site doesn’t tell you is that Saylor Lane and five other nursing homes in the Sacramento region are owned by John Lund, a Montecito businessman charged in 2008 with 18 felony counts of defrauding Medi-Cal, filing false cost reports and perjury.

Full Article & Source:
Part 3: California falls short in disclosing nursing-home ownership

See Also:
Unmasked: How California’s largest nursing home chains perform

Unmasked: Who owns California’s nursing homes?
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Jennifer said...

It's the same in all states. Just because you don't live in CA, doesn't mean your state is ok.

StandUp said...

I just can't say how much I admire Pat McGinnis and the good work of CANHR!

Anonymous said...

great series, thanks.