Clinton Calls for GAO Investigation to Examine Long-Term Care Ownership Structures
Call Comes as a Result of New York Times Analysis of Nursing Homes Across the Country
Washington, DC – Citing a September 23 New York Times article that reviewed more than 15,000 nursing homes across the country, Senator Hillary Rodham Clinton today called for a Government Accountability Office (GAO) investigation to examine the nation's long-term care infrastructure. In a letter to Comptroller General of the United States, David M. Walker, Senator Clinton expressed her concern over accountability and the ability of the states and federal government to provide appropriate oversight and sanctions, and highlighted the decline in the quality-of-care related to the purchase of nursing home facilities by private investment groups.
"I am deeply concerned that these new ownership structures may allow private investment firms to effectively control, and profit from, the operations of nursing homes without taking a formal ownership or management stake in the nursing home itself. As a result, these hybrid structures may make it difficult, if not impossible, for federal and state regulators to identify and effectively penalize repeat offenders," Senator Clinton wrote.
"The vast majority of the nation’s nursing homes provide quality care to their residents,” Clinton emphasized. "But the abuses cited in the story are intolerable and we must do all that we can to weed them out and shut them down."
[A copy of Senator Clinton’s letter to the GAO follows]
The Honorable David M. Walker
Comptroller General of the United States
United States Government Accountability Office
441 G Street, N.W.
Washington, D.C. 20548
Dear Mr. Walker:
An article in the September 23rd edition of The New York Times on the abhorrent conditions in a number of nursing homes across the country reinforces my concern that we are not doing enough to protect and care for our seniors living in long-term care facilities. The article documented a troubling trend— that facilities which are purchased by private investment groups experience marked declines in the quality-of-care, alongside cuts in nursing staff and other resources. A review of more than 15,000 nursing homes since 2000 revealed that despite sub-standard conditions, these nursing homes and the private investment firms that purchased them have gone largely unsanctioned by federal and state regulators because they have employed complex hybrid ownership structures.
I am deeply concerned that these new ownership structures may allow private investment firms to effectively control, and profit from, the operations of nursing homes without taking a formal ownership or management stake in the nursing home itself. As a result, these hybrid structures may make it difficult, if not impossible, for federal and state regulators to identify and effectively penalize repeat offenders. As The New York Times analysis highlighted, regulators may be unaware that the same private investment firm is responsible for many seemingly unconnected nursing home operations. In addition, such ownership structures may obscure how Medicare and Medicaid dollars are being used, enabling nursing homes to inflate their own profits at the taxpayers’ expense.
These revelations come at a time of crisis in our nation’s long-term care infrastructure. Just last year, nearly one in every five nursing homes that received federal funds was cited for serious deficiencies in care. And earlier this year, we learned that, over the past five years, nearly half of the nursing homes that regulators had identified as having an established history of serious medical deficiencies continued to repeatedly fail federal requirements and still receive federal funds.
The vast majority of the nation’s nursing homes provide quality care to their residents. I believe the “bad apple” practices cited in The New York Times story are the exception, not the norm. Having said this, the abuses cited in the story are intolerable and we must do all we can to weed them out and shut them down.
I am confident that the long-term care industry can continue to flourish while ensuring our seniors receive the care they deserve. Private investment firms can have a constructive role to play in this market, helping restructure, retool and improve profitability at struggling nursing homes. However, this newly-released data linking hybrid ownership structures with serious quality-of-care deficiencies in our nation’s nursing homes raises important questions about accountability and the effectiveness of our existing regulatory framework. It also raises the critical issue of how inadequate staffing and a substandard commitment to health professional and paraprofessional recruitment and retention can decrease quality as well as patient and family confidence in the nation’ s nursing home industry.
For this reason, I would ask that you investigate the link between hybrid ownership structures of federally-funded nursing homes and poor quality of care. In particular, I would appreciate an assessment of the ownership structures of the 63 nursing homes that the GAO identified in March 2007 as having a history of serious deficiencies in care. Finally, I would ask that you make recommendations on any needed changes to the Centers for Medicare and Medicaid Services’ regulatory framework or other federal laws to bring greater transparency and accountability to federally-funded nursing homes.
I thank you for your attention to this matter. Please keep me apprised of the status of this request.
Sincerely yours,
Hillary Rodham Clinton
