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Nursing Home Abuse Law Could Stiffen Penalties, Change Rules Regarding Private Equity Firms

Nov 16, 2007 | Parker Waichman LLP

Nursing home abuse is finally getting some attention from Congress, where two separate hearings were held yesterday to discuss the problem.   Committees from both the House of Representatives and the Senate took up the nursing home abuse issue, and now Congress will consider legislation to deal with this serious problem.

Nursing home abuse is one of the most serious problems facing this country’s elderly.  Though it concedes that the true number is probably much higher, The National Center on Elder Abuse estimates at least one in 20 nursing home patients has been the victim of abuse. According to the National Center’s study, 57% of nurses’ aides working in long-term care facilities admitted to having witnessed, and even participating in, acts of abuse. The report sites systemic problems within the nursing home industry, like inadequate pay for workers and chronic understaffing, as contributing to the epidemic of abuse. There are nearly 1.4 million Americans living in nursing homes right now, and that number is expected to more than double in the next decade. As it does, advocates for the elderly and disabled fear that incidences of abuse will continue to climb as well.

As a result of yesterday’s hearings, two Senators, Charles Grassley (R-Iowa) and Herb Kohl (D-Wisconsin), are working on legislation that would stiffen penalties for nursing home abuse.  The bipartisan legislation would give more enforcement power to the U.S. Centers for Medicare and Medicaid Services, which oversees state inspections of the nation's 16,400 nursing homes and also pays for the care of many poor and elderly residents.

The bill would also address growing concern about increased ownership of nursing homes by private equity firms, amid media reports that such ownership leads to poor quality care.  Private equity firms generally buy nursing facilities, cut costs and resell them for a profit.  But these acquisitions could be coming at a great cost to nursing home patients. According to a New York Times investigation, facilities owned by private investment firms score worse than national rates in 12 of 14 indicators regulators used to track ailments of nursing home residents. And the Centers for Medicare and Medicaid Services says that residents of such nursing homes suffer more from depression, loss of mobility and the loss of the ability to dress and bath themselves.  Unfortunately, private investment firms have created complex corporate structures that obscure nursing home ownership, making it difficult to hold them accountable for nursing home abuse.  The complex ownership structure also means that sometimes managers can even legally bypass Medicare and Medicaid reporting requirements.  The proposed nursing home abuse legislation would require public reporting of ownership information, including affiliates, and deny payments for new residents until problems are fixed.

Advocates for nursing home residents can only hope that the legislation proposed by Grassley and Kohl will soon become law, although similar legislation has languished in Congress before.

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