For-Profit Nursing Homes and California’s Public Health Funding

Closeup of assorted coins.

Many of us with elderly loved ones who have spent hours and days investigating nursing homes and assisted-living facilities know that most for-profit facilities are not providing the quality of care that most of us seek. An article in Bloomberg emphasized that “for-profit nursing homes lead in overcharging while care suffers.” A number of the facilities profiled in that article had settled wrongful death lawsuits in recent years or had otherwise faced allegations of nursing home abuse and neglect resulting in the serious injuries and deaths of patients.

Why should California residents focus on the problems that have been linked to for-profit facilities? According to a recent press release from the California Advocates for Nursing Home Reform (CANHR), a bill that just passed the Assembly Health Committee without any opposition “would open up two very important public and non-profit health financing mechanisms to for-profit nursing home corporations.”

Risks of Public Funding Usage at For-Profit Nursing Homes

The bill, AB 2104, according to the news release, “would expand the California Health Facilities Financing Authority and the California Health Facility Construction Loan Insurance Fund to include for-profit corporations.” Those for-profit corporations highlighted in the bill are businesses that currently run skilled nursing facilities in our state. Through the proposed law, those for-profit corporations would be able to use public health money to expand upon their current facilities for the elderly or build new ones entirely. The bill would allow skilled nursing facilities that operate with the aim of making money from patients to use public money from California to build or expand those facilities.

There are restrictions to what kinds of for-profit corporations would be eligible for California public health funding. The businesses would need to meet one of the following conditions:

Operate a skilled nursing facility with at least 95% of its patients receiving Medi-Cal benefits;

Operate a skilled nursing facility that has plans to create a new facility or would expand its currently facility to include more beds; and

Operate a skilled nursing facility in which at least 65% of the patients are receiving Medi-Cal benefits if funding remains available and the facilities described above already have been funded.

Likelihood of Funding Going to For-Profit Companies

While the press release emphasizes that it is unlikely that many for-profit facilities—if any at all—currently are filled by at least 95% with beneficiaries of Medi-Cal (and thus would not be likely to qualify for funding under the bill), this fact alone does not mean that for-profit facilities would not benefit from public funds. Given that few facilities would have enough Medi-Cal beneficiaries to be eligible for money from the state, a majority of the funding provided for by the bill likely would go to for-profit corporations with plans to build or to expand.

By allowing for-profit skilled nursing facilities to obtain state funding, public facilities likely will suffer, the news release emphasizes. CANHR intimates that the proposed bill is based on a misunderstanding—that there will be more demand for skilled nursing facility beds than California currently has, particularly with the growing population of older adults. By that logic, we need to incentivize the construction of facilities with additional beds. However, the news release suggests that, rather than a demand for more beds, Californians tend to be looking more toward alternate facilities like in-home care, assisted-living centers, and other community-oriented living solutions.

If you have questions about nursing home abuse, an experienced nursing home abuse attorney in San Diego can assist you. Contact the Walton Law Firm today for more information.

 

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