Facilities News Spotlight

2024-04-09 Spotlight: Care At Risk: Upheaval in the Nursing Home Industry

Care At Risk: Upheaval in the Nursing Home Industry 
By Siobhan Standaert
December 2023

Executive Summary
A small group of lesser-known nursing home chains with poor patient safety records are taking over a growing share of the long-term care industry as some of the larger players abandon the business. Federal and state regulators have been slow to keep up with ownership changes, hampering critically needed increased oversight of recidivist companies.

A dozen of these bad actors—some of which have doubled or tripled in size in recent years by purchasing facilities sold off by more established operators—have been averaging over $100,000 in penalties per facility, nearly three times the national level. These firms, such as Arcadia Care, Brius Health Care, Aperion Care, and Infinity Healthcare Management, also perform poorly in the federal government’s nursing home rating system, averaging only 2 on a 1-5 scale where 5 is best.

Many of the penalties paid by these chains stem from serious abuses. An Illinois-based facility operated by Aperion Care was fined $243,000 for failing to properly administer blood work resulting in a resident death. A facility tied to Infinity Healthcare was penalized over $300,000 for failing to prevent physical and sexual abuse between residents.

These findings come from an analysis of 28,000 regulatory enforcement actions covering the past five years, collected for addition to the Violation Tracker database of corporate misconduct. The penalty records were obtained from both the Centers for Medicare and Medicaid Services (CMS) and state regulators, which share responsibility for overseeing nursing homes.

Some states are not transparent about their enforcement activity. Seventeen of them fail to put information on penalty cases on their agency websites and refused to supply it in response to open records requests submitted by Good Jobs First. We were able to fill those gaps with data provided by CMS and thus were able to determine the volume of enforcement activity for each state. This revealed wide variations across the country when measured in relation to each state’s number of facilities.

States such as Oregon, California, and Arkansas have brought an average of over 15 cases per facility over the past five years and have imposed an average of more than $100,000 in fines per facility. At the other end of the spectrum, states such as Alabama and Maine have averaged less than 2 cases and under $25,000 in fines per facility.

Such wide disparities indicate that CMS needs to do more to raise the level of enforcement in the laggard states. Given that they share oversight responsibilities with CMS, all states should be held to high, uniform levels across the country. This should include both those facilities that participate in Medicare and Medicaid and those that do not.

The new nursing home staffing requirements announced recently by CMS may improve the situation in facilities across the country, but only if they are adequately enforced. CMS also needs to make improvements of its own when it comes to information gathering. For a long time, the agency’s data collection failed to keep up with ownership changes in the nursing home industry, especially  when private equity firms began making acquisitions in the early 2000s. This made it difficult to see how these changes were affecting the quality of care.

A provision in the Affordable Care Act of 2010 was designed to rectify this by expanding ownership data collection by CMS and requiring that the data be shared with the public. That requirement was largely ignored until last year. CMS is now making a more serious effort to monitor ownership relationships, but our research for this report suggests that there are still serious gaps in the agency’s system.

Better transparency by itself will not eliminate deficiencies in the quality of care, but it will make it easier to identify the worst operators and help pressure them to improve their practices.