Nursing Home Industry Readies to Battle Reform

Washington D.C.’s most powerful lobbyists are being hired by the nursing home industry to fight congressional efforts to reform the industry. The industry is closely watching bipartisan legislation that would significantly increase oversight and enforcement of nursing homes around the country.

The new legislation, recently introduced by Sens. Grassley (R) and Kohl (D), would require nursing homes to fully disclose their ownership structures, and would increase penalties if a patient is injured or dies due to negligent or neglectful care. The industry is expected to pay millions to fight this legislation.

Why would nursing home owners disapprove so strongly of a law that requires them to disclose who actually owns and runs the facilities that provide them such a great profit? Liability. Many owners have created maze-like ownership structures that makes it nearly impossible to find out who actually owns the facility when something goes wrong. It’s not uncommon to have a one corporate entity own the building, who then leases it to a second company (the nursing home), who then contracts with a third company to operate it.

Unbeknown to most, however, is that all three corporate entities are run by the same individuals. And when things go bad, the entity most liable for poor care, usually the operator responsible for the day-to-day care, has nothing to offer the resident that was injured or killed because the it carries no insurance, has no assets, and makes no profit. In effect, the victim gets victimized twice.

This new legislation would make the ownership structure transparent, which some advocates say is not enough.

It is nice to know [who the actual owners are], but then what?” said Toby Edelman, senior policy attorney at the Center for Medicare Advocacy. “How do you get these people to be not only identified but accountable?”