Lori Smetanka (Photo: Senate Finance) Lori Smetanka (Photo: Senate Finance)

Lori Smetanka talked to senators earlier this week about an alarming type of risk facing U.S. residents who are already sick, disabled or frail enough to live in long-term care (LTC) facilities: the risk that the corporate owners of the facilities could collapse.

(Related: Medicaid Squeeze Hurts Nursing Home Quality: Witnesses)

Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, testified Tuesday, in Washington, at a Senate Finance Committee hearing on elder justice.

Smetanka and the other hearing witnesses focused mainly on concerns about the quality of care at nursing homes and other LTC facilities.

Smetanka also discussed nursing home owner solvency risk.

For-profit companies now own many U.S. nursing homes, and, in many cases, the true owners of the nursing home companies are private equity investors, Smetanka testified, according to a written version of her testimony posted on the Senate Finance website.

The federal Centers for Medicare and Medicaid Services (CMS) regulates each nursing home as a separate entity, but, in many cases, nursing home companies make decisions about matters such as operational budgets and staffing at the corporate level, Smetanka said.

Some states do look at a corporate nursing home owner’s financial and management capacity, but others do not, Smetanka said.

In 2018, Smetanka said, the collapse of one large corporate owner affected nursing homes in eight states.

States had to step in and take control over the nursing homes through receivership proceedings, “to make sure the residents received food and care,” Smetanka said. “Thousands of residents and facility staff have been affected, suffering through poor living and working conditions, facing loss of home and jobs as many of the facilities are closing, some in communities where alternative options are limited or nonexistent.”

Smetanka said Congress should do the following to protect consumers against the collapse of nursing home owners:

  • Give CMS authority to regulate the corporate owners, not just individual nursing homes.
  • Establish minimum owner or management standards for nursing home owners that want to serve Medicare or Medicaid patients.
  • Exclude corporate owners that fail to comply with nursing home closure requirements from participating in Medicare and Medicaid programs for a specified period of years.
  • Require detailed reports on nursing home related-party companies and owners.

Resources

Links to Senate Finance elder justice hearing documents, including a video recording of the hearing, are available here.

— Read 7 Cities Where Nursing Homes Let Patients Get Bedsores, on ThinkAdvisor.

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