by James C. Sherlock
Nursing home operators, paid by government insurance programs on a per diem basis for caring for their patients, make higher profits if they understaff than otherwise.
The less staff they have, the higher their operating margins.
The federal government, with much experience in such situations, tries to offset those incentives with disincentives. It thinks, reasonably, that patients should actually receive the care that is paid for with government insurance funds.
In Virginia, some senior members of the health committees of the General Assembly are in love with our nursing home operators, offering legislation as gifts. That love is requited in the form of unlimited campaign contributions from the operators.
This being Virginia, that is legal. And too common.
However, help for patients is available and very active on another front: fraud charges brought by states and the Justice Department in federal court.
The unanimous Supreme Court opinion in Universal Health Servs., Inc. v. United States 136 S. Ct. 1989 (2016) • 195 L. Ed. 2d 348 Decided Jun 16, 2016 provided precedent for such filings under the False Claims Act.
The Court validated the government’s theory of law that a provider can be guilty of making a false claim based on the underlying representation that the care provided complies with the government Conditions of Participation.
Grossly understaffed nursing homes can be guilty of criminal or civil false claims or both by accepting payments for services which they do not provide or provide inadequately.
Both state and federal governments know exactly who those understaffed nursing homes are and have the payroll-based data to prove that some could not have provided it.
And they are taking the worst offenders to court.
Background. Conditions of Participation (CoPs) are qualifications developed by CMS that healthcare organizations must meet in order to begin and continue participating in federally funded healthcare programs (Medicare, Medicaid, CHIPS, etc.).
Those government programs pay certified nursing facilities per diem reimbursements for their patients. In other words, nursing homes do not submit invoices for medical care, housing, feeding or anything else, just for days patients spent in the facility.
Patient acuity is the measure of the severity of illness or medical conditions of a patient and the intensity of nursing care required by a patient. That assessment is made for each patient as part of the admissions process.
Per diem payment rates are adjusted for both those patient acuity assessments and for regional costs. They are paid with the assumption that the necessary nursing care has been provided.
State and federal efforts to prosecute nursing homes for fraud. Medicaid Fraud Control Units (MFCUs) exist in every state Attorney General’s office. Virginia has one with a good track record.
The U.S. Department of Health and Human Services Office of Inspector General Medicaid Fraud Control Units (MFCU’s) Fiscal Year 2022 Annual Report outlines the criminal and civil outcomes achieved by MFCUs in FY 2022, including total recoveries of $1.1 billion with an ROI of $3.08 for every $1 spent.
From that report’s Exhibit B2 you will see that nursing facilities were the subjects of by far the largest number of open criminal cases (128). We don’t know how many of those open cases may be investigating Virginia nursing homes.
But Virginia ranks among the worst states in the nation for nursing home staffing.
Definitive Healthcare reported on July 12 that the average CMS staffing score for Virginia nursing homes is 2.1 out of a possible five. Among the states, only Indiana, Ohio, Louisiana and Texas rank lower. In the CMS “overall” score, only five rank lower. Barely.
An indictment on one of the open fraud cases from 2022 was returned in February 2023:
A federal grand jury in the Western District of Wisconsin returned an indictment yesterday charging Kevin Breslin, 56, of Hoboken, New Jersey, and KBWB Operations, LLC, doing business as Atrium Health and Senior Living (Atrium) in Park Ridge, New Jersey, with a scheme to defraud Medicare and Medicaid in connection with the delivery of or payment for health care benefits, items, or services.
The indictment charges the defendants with health care fraud, six counts of wire fraud, three counts of mail fraud, conspiracy to commit tax fraud, and conspiracy to commit money laundering.
The indictment alleges that when the defendants obtained money from Medicare and Medicaid,
they certified that they would follow all required quality of care standards, but they did not do so, and that they would operate their facilities with adequate staffing, supplies, and services, but they did not do so.
Bottom line. Those nursing homes that are understaffed have readily available remedies.
If they do not have enough nurses and/or enough of the right types of nurses for the size and acuity of their patient load, they can reduce the patient load until that mismatch is remedied.
That need not require moving any patients.
As it happens, their highest acuity populations are the same patients who generally stay the shortest periods of time — patients requiring skilled nursing services. Nearly all of those are discharged within 100 days of arrival, some in much shorter periods of time.
Facilities can, on their own, stop taking new patients until their level of nurse staffing aligns with patient needs, and then resume taking new ones.
That won’t cure the vulnerability of long-time abusers of the rules, but will avoid prosecutions for future violations.
The winners are the patients. Which is the goal of the government in prosecuting the bad guys.
Updated Aug 22 at 15:40 to define potential penalties.