Nursing Homes Claim Poverty While Increasing Profits
Over the summer, nursing homes across the US lost a battle with Medicare that will cost the industry $3.87 billion. Medicare is attempting to recover overpayments and stop overpaying facilities. Daily payment levels were miscalculated allowing facilities to overbill for services by claiming they were providing more intensive care. A statement from the organization says the reductions are meant to “correct for an unintended spike in payment levels and better align Medicare payments with costs.”
But Mark Parkinson, the chief executive officer of the nursing home lobby the American Health Care Association, argues the program is making too many cuts too fast and nursing homes will be unable to adjust. Bloomberg.com reports that even after acknowledging overpayments, lobbyists claim Medicare is making too many cuts rather than closing billing loopholes. Many are warning that the reductions will adversely affect standards of care in nursing homes. In other words, the nursing home industry is saying that Medicare pays so little money that if there are further cuts, nursing homes will not be able to afford to pay enough staff to meet the needs of the residents. As result, they will be forced to cut staffing levels and residents will suffer from nursing home neglect.
If the nursing home industry’s claims are true then by all means Medicare should not cut their reimbursement. The problem is that all public evidence available shows exactly the opposite. The Medicare studies all point to the fact that nursing homes have continued to have profit margins greater than 10% for the last 7 years. In fact, in 2007 the industry profit margin was 14.5% and in 2009 it went up to 18.1% according to Medicare. That does not seem like an industry suffering from the down turn in the economy. Of course, the nursing home industry could easily open up their private financial records to the public if they disagree with the public data available. However, it is doubtful that would ever happen because it would expose the lavish lifestyles that many nursing home operators live while their residents suffer from avoidable conditions such as pressure sores, dehydration, over medication, and other forms of nursing home neglect.
Nursing home owners and operators are, in this situation, using scare tactics to preserve their way of life. It has always amazed me that government regulators response to the nursing home industry putting profits over people has been to protect the industry from lawsuits meant to punish them for providing bad care. Facilities have a duty to provide appropriate care to their patients. If they cannot do so and still make the profit that they want to make, then they should get out of the business.