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Volume 12 Number 186
ISSN 1091-4021
Wednesday, September 26, 2007

News: Nursing Homes

In an Oct. 2 letter to the Government Accountability Office (GAO), Sen. Chuck Grassley (R-Iowa) asked for a review of the effect of private equity ownership on the quality of care provided in nursing homes.

Grassley told GAO Comptroller General David M. Walker in the letter that he had read with "great concern" a recent New York Times article examining the private equity ownership on the quality of care provided in the country's nursing homes.

"It appears that the investors may be increasing their profits at the expense of the health and safety of nursing home residents," Grassley said.

Grassley also included his concerns about the findings in a statement he made Oct. 2 in the Senate. According to Grassley, the findings in the article, which used numbers from the Centers for Medicare & Medicaid Services to compare several investor-owned nursing home chains to industry-wide averages for several indicators, were "alarming."

Grassley, the ranking member on the Senate Committee on Finance, which has legislative and oversight responsibility for Medicare and Medicaid, has been active in oversight of actions by CMS related to nursing home quality of care.

Investigate Allegations

"Is this a case of profits before care? Well, I'm not sure," Grassley said in his floor statement. "But I certainly intend to look into it. I intend to investigate allegations that some large investment firms are buying up nursing homes across the country and are hurting quality of care."

Grassley said CMS should shoulder some responsibility for the problems, and must do a better job of protecting seniors in the nation's nursing homes.

In his letter, Grassley asked the GAO to conduct a review and report on the following:

• the total number of nursing homes purchased by private investment groups each year for the last five years;
• the percentage of total nursing homes that are owned by private investment groups, including percentages by state, each year for the last five years;
• the condition of nursing homes at the time of purchase by a private investment group;
• the names of the investment groups that have purchased nursing homes over the last five years, as well as the number of homes purchased per year;
• the condition and status of nursing homes in the years following purchase by private investment groups compared to other homes;
• the number and types of complaints against investor-owned nursing homes compared to other noninvestor-owned nursing homes;
• the number and types of health and safety deficiencies and violations cited at investor-owned nursing homes by state and federal regulators in each calendar year over the last five years compared to other homes;
• the role of CMS in the oversight of investor-owned nursing homes; and
• recommended policy options to help improve the oversight and accountability of investor-owned nursing homes.

In his floor statement, Grassley said he will take a very active role in looking at the nursing home issue and will be speaking with nursing homes, equity firms, and CMS. Grassley added, "We owe it to America's nursing home residents--and we owe it to their families."