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For-Profit Nursing Homes Overcharging Medicare as Residents Suffer

Although an immense amount of trust is placed in American nursing homes, our nursing home negligence lawyers recognize that some, particularly for-profit facilities, are prioritizing profit margins over patient care.

A recent article in Bloomberg News revealed many troubling issues posed by our country’s nursing homes. The article cited November reports by federal health care inspectors from the U.S. Department of Health and Human Services, which found that each year the nursing home industry over-bills Medicare $1.5 billion for treatments patients who either never receive or never needed care in the first place. In 2011, Medicare spent nearly $32 billion on skilled nursing facility care. That year, 70 new facilities began participating in the Medicare program, almost all of which were for-profit homes.

We should be able to trust nursing homes throughout the country are focused on a common goal: to provide the best possible care for their patients. Federal and investigative reports, however, speak to the contrary. Much research proves that for-profit nursing homes are significantly more likely to pursue monetary gain than non-profit ones, even at the expense of elderly clients. A reported 78% of the nursing home industry revenues went to for-profit facilities in 2010, even though they account for only about 67% of all nursing homes.

What is troubling about this trend is the rapid growth of for-profit nursing homes in the United States. For example, the supply of hospice care increased 53% between 2000 and 2010, and for-profit providers accounted for almost the entire increase. That is a ten-fold growth over non-profits. For-profits also operate 85% and 84% of dialysis clinics and home-health care agencies, respectively.

A 2012 report by the Medicare Payment Advisory Commission, or Medpac, from which many of these figures are cited, stated that they did not have sufficient data to assess the quality of hospice care provided to Medicare beneficiaries. During the past three years, however, the U.S. Justice Department settled civil fraud complaints against eight hospice companies that were enrolling or retaining patients who did not need hospice care. Avoidable hospice admissions increase Medicare’s spending, expose beneficiaries to additional disruptive care transitions, and can result in adverse health consequences.

The supply of hospices increased 53% between 2000 and 2010, and for-profit providers accounted for nearly the entire increase. The report cited a lack of sufficient data to assess the quality of hospice care provided to Medicare beneficiaries.

Medicare’s rules allowed facilities to bill for therapy that was not provided. Under the old regulations, payments were determined by assessing each patient during a limited window of time, but this assessment is used to establish payments over a longer period of time. Until recently, Medicare rules did not require facilities to reassess patients when their therapy care needs changed and the program did not reconcile payments with the actual amount of therapy provided.

Unnecessary medical treatment can be extremely harmful, especially for the elderly. Employees of large nursing home chains are speaking out about this issue, affirming that they feel encouraged to maximize reimbursement even when treatment is inappropriate.

Billing for unneeded therapy is neither the worst nor the most dangerous of the profit-seeking schemes, however. Between 2003 and 2008, the 10 largest for-profit nursing homes chains in the nation employed 37% less registered nurses per patient, and received almost 60% more deficiency notices from federal inspections, than non-profits. This fact illuminates the stark reality of for-profit facilities – that they are actively and intentionally sacrificing patient care to put more cash in investor’s pockets.

Facilities lacking in registered nurses are unable to adequately care for each patient, unable to monitor patients who require it, and unable to oversee happenings at the facility. Overworked employees make more mistakes, which could be deadly for vulnerable patients on diligent medication schedules, living with breathing tubes or catheters, or who are immobile without the aid of a nurse. For-profits are even cutting staff’s overtime hours in effort to control cost.

Nursing home neglect and abuse lawyers encourage the continued investigations into for-profit nursing homes, the manipulation of Medicare billing, and cases of senior rights violations. If your loved one suffered elder abuse or neglect, it is important to contact a skilled nursing home abuse lawyer today because the law limits the amount of time you have to file a claim.