Secret Bounty Offered To Nursing Homes Who Close Beds

Representatives of Indiana's Three Statewide Organizations to Meet With Secretary Roob

This spring, Steve Smith, director of the Indiana Division on Aging, announced he was negotiating with nursing facilities and accepting pledges from nursing homes willing to decertify Medicaid nursing home beds. In return, he stated, the Division was agreeing to pay facilities to close the beds if the beds were currently occupied.

The planned "bed buyout" is in response to Secretary of Family and Social Services Administration Mitch Roob's announcement several months ago of his goal of closing 1,500 nursing home beds by June 30, 2007. These beds are to be decertified from the Medicaid program and, therefore, would no longer be a cost for the State.

At subsequent meetings and from reports received from providers in the field, the bounty has been set at $10,000 for an unoccupied bed and $25,000 or more for an occupied bed!

Advocates on several occasions requested further information as to what the criteria for buyout would be, how much was being offered, and who would ensure that the buyouts were done in a way that protects residents.

In a letter to Mr. Smith dated June 9, 2006, United Senior Action voiced those concerns and requested further clarification. No response has been forthcoming.

Here is our letter:

Dear Steve:

At a recent meeting, you shared information regarding how "beds" would be selected for closure and consumers identified for transition out of nursing homes. It is my understanding from your comments that a facility would submit a plan to close/decertify beds to FSSA. The request would then be reviewed by FSSA, the local area agency on aging and the state ombudsman, and all would need to "sign-off" on the plan. You further stated that the "new site" included in the transition plan must accept the consumer.

Upon giving this significant thought, United Senior Action has considerable concern about exactly how this process will work and requests clarification. Specifically:

1. How will consumers who currently reside in a nursing home, request consideration for relocation to their community or home?


2. We understand from you that the total cost savings needed in order to implement other key components of SEA 493 such as the 300% of SSI eligibility level will require the buy-out of approximately 1,500 beds. It is not clear to us how many of these beds will be occupied versus unoccupied. Of the number of beds you anticipate decertifying, and therefore paying facilities to close those beds, how many will be currently occupied beds versus unoccupied beds?


3. If a facility identifies an occupied bed for closure and submits a plan to the state that includes moving the resident to a bed at a different nursing facility, the effects could be devastating, including life threatening, to a resident. How will these requests be handled?


4. We believe the ombudsmen, both state and local, are key to making transition to home and community based care successful. To this end, with our ombudsman program severely underfunded, what are your plans to increase the program's capacity to evaluate the availability and appropriateness of other care options and to ensure quality of care and life for all long term care consumers on an ongoing basis? Who will be responsible for the development and maintenance of a care plan for the consumer?


5. What type of appeals process will be available for consumers?


6. At McCurdy, you indicated that the state will be paying for the installation of sprinklers in all but the top two floors. Why not all 8 floors?

I hope you will accept these questions in the spirit of cooperation that has been established in our working sessions. These sessions have been extremely valuable as has the leadership you and your staff have shown in moving forward the implementation of SEA 493. I appreciate your attention and await your prompt response.

Sincerely,
Michelle L. Niemier
Executive Director

At a subsequent meeting, Mr. Smith invited Robyn Grant, USA's Long Term Care Policy Director, to submit protocols regarding both how the transition process for facilities closing beds should occur as well as protocols for protecting consumers/residents affected by any bed closures. In August, this information was submitted to the Division on Aging on behalf of the Indiana Home Care Task Force.

Key components of United Senior Action's recommendations are: a focus on what is in the best interest of residents including, but not limited to, protecting a resident's right to say no to any proposed move; having all proposed deals reviewed by an independent group; and involvement of area agencies on aging and ombudsmen in process.

No response to USA's June 2006 letter nor the suggested guidelines have been received as this issue of the United Senior Advocate goes to print.

Members of the Indiana Home Care Task Force including USA, AARP, the Indiana Alliance for Retired Americans, Generations Project and others, have been in negotiations with the Indiana Division of Aging for several months. These negotiations were halted in August when Division of Aging Director Steve Smith determined they were producing "diminishing results."

Since Mr. Smith had not responded and had discontinued discussions with advocates, United Senior Action, AARP Indiana, and the Indiana Alliance for Retired Americans sent a letter requesting a meeting with Mr. Roob. That meeting is expected to take place the first week in October.

Why A Buyout At All?

What originally began as a "small" incentive for nursing homes to decertify beds seems to be becoming a boondoggle for the entire nursing home industry. Pledged payments of $10,000 for occupied beds has now changed to include unoccupied beds and amounts are rumored to be over $25,000 per bed! "Rumored" is the key word here as all deals are being discussed secretively with absolutely no public scrutiny, United Senior Action cannot confirm the amounts offered.

The larger question is why would the State offer a bed buyout in the first place? Officials have argued that the decision to offer financial incentives to the nursing home industry is about supply and demand, i.e., if you restrict the number of available nursing home beds, you encourage consumers to choose an alternative.

This argument is nonsensical. If you are focusing on consumer choices, virtually every consumer would prefer home care, assisted living, adult day and other options over nursing home care.

However, if you build out the supply of alternatives to nursing homes (increase supply) in response to consumer demand, consumers will choose these alternatives and nursing home beds will go unused anyway. Expanding alternatives results in what consumers and the State are trying to accomplish without paying nursing homes a bounty at all.

The only logical conclusion United Senior Action can make is that the State simply wants to keep nursing home owners who donated thousands of dollars to political campaigns happy.

United Senior Action and the other senior organizations are trying to ascertain how many deals have been made, how much money is involved and whether any funds have exchanged hands.

"What we have here is a clear case where the State is wheeling and dealing with taxpayer money without one bit of oversight by those very same taxpayers," said Niemier. "Each and every potential deal must be disclosed, and an independent process for approving any closure plans should be established immediately. There should be no secrecy. It's taxpayer money."

The secrecy surrounding these deals raises questions about how much money that could be used for improving our long term care system will be used to benefit only nursing home owners, added Niemier.

"We simply should not be putting more money into institutional care when home and community based care is out of the reach of thousands of men, women and children in this state."

Story Gathering An Important Next Step

United Senior Action and other advocate groups will be pushing even harder in coming weeks to resolve the many issues raised in this article. Your help is needed.

If you have been affected by Indiana's broken long term care system, tell us your story. In a short page or two, write to Amber Garcia, Intern, United Senior Action, 324 W. Morris Street, Suite 114, Indianapolis, Indiana 46225. You can also e-mail her at info@usaindiana.org. We hope to use these stories in our campaign and to print letters received in future issues of the United Senior Advocate.