NIC Notes

Insights in Seniors Housing & Care

By: Ryan Brooks  |  May 06, 2021

Congressional Hearings and Confirmations Spotlight Seniors Housing & Care Sector

Regulatory Environment  |  Seniors Housing  |  Skilled Nursing

Over the last month, a series of congressional hearings and confirmations shined a spotlight on the seniors housing and care sector as a whole, as well as a number of areas impacting the industry. The hearings followed a tumultuous year of navigating the COVID-19 public health emergencies and subsequent media scrutiny, and covered a wide range of topics, including staffing necessities, private equity investment, quality metrics, home and community-based services (HCBS) funding, reimbursement pressures, telehealth flexibilities, and dual-eligible care coordination.

Below is a summary of key points from each hearing.

Senate Committee on Finance: A National Tragedy: COVID-19 in the Nation’s Nursing Homes

On March 17, the Senate Committee on Finance, chaired by Sen. Ron Wyden (D-OR), held the hearing “A National Tragedy: COVID-19 in the Nation’s Nursing Homes.” The hearing included testimonies from a nursing care certified nursing assistant (CNA), an AARP Director, a long-term care ombudsman, American Health Care Association’s (AHCA) Chief Medical Officer, Dr. David R. Gifford, and University of Chicago Public Health Sciences professor, Dr. Tamara Konetzka.

AHCA’s Dr. David R. Gifford shared testimony that sought to educate the committee on the needs of nursing home residents, the emotional and physical toll the pandemic had on residents and staff, as well as the multitude of challenges operators faced during the public health emergency. These challenges included the constantly evolving and sometimes conflicting guidance from local, state, and federal governments, the lack of reliable and timely testing, personal protective equipment (PPE) shortages, and the workforce crisis that was exacerbated by the pandemic.

With regards to the existing standard quality metrics, Dr. Konetzka of University of Chicago highlighted that “multiple rigorous studies” have found standard quality metrics do not have a meaningful association with COVID-19 outcomes for nursing homes and that even prior infection control citations were not associated with COVID-19 outcomes. Konetzka’s comments echo a 2019 GAO report that quality measures should better align with CMS’s strategic objectives at improving care quality rather than simply additional obligations of providers.

Gifford’s testimony also emphasized that COVID-19 didn’t cause problems that exist in the sector, but rather exacerbated or brought them to light. This is true on the staffing front as well – staffing challenges predate the pandemic. Thus, when the pandemic hit, tight staffing levels went from a strain to a crisis itself. Adelina Ramos, a Rhode Island Certified Nursing Assistant shared key points on this topic, including the often-low starting wages for skilled nursing workers, the prevalence of skilled nursing workers working multiple jobs, and that the often-low staffing ratios themselves tend to feed into the employee turnover challenge.

Konetzka highlighted that “Though community spread of COVID-19 and facility size have proven to be the top predictors of nursing home outbreaks in multiple studies, staffing does have an effect on how a COVID-19 outbreak plays out. More staff did not reduce the chance of outbreaks, but more staff hours meant fewer deaths and cases once an outbreak occurred.”

Dr. Gifford cited a November 2020 survey of skilled nursing providers that found 70 percent of nursing homes had hired additional staff and 9 out of 10 asked staff to work overtime and provided hero pay. Gifford summarized AHCA/NCAL’s actions relative to staffing through the pandemic – developing free online courses to train temporary caregivers, urging Congress to direct financial aid to long-term care properties, and sharing a strategy roadmap with governors to address the workforce shortage. Gifford summarized the sector’s needs by saying, “We need ongoing staff support as this pandemic continues, but we also need a more long-term solution. … We need a comprehensive strategy to recruit more health care heroes to serve in long term care.”

A National Bureau of Economic Research (NBER) study on private equity investment in healthcare made its way into the hearing multiple times. The study included data on 1,674 nursing homes that were acquired by private equity firms in 128 unique deals between 2000 and 2017. The study cited instances of bad outcomes for nursing homes that were acquired by private equity owners. These include elevated risk of death for short-term Medicare patients, higher rates of antipsychotic drug use, and increased taxpayer spending on episodes of care.

The American Investment Council has pushed back on the NBER findings, saying that “private equity firms make long-term investments in…nursing homes to help rescue, build, or grow businesses, often providing much-needed capital to strengthen struggling companies.” The council also said that the NBER research hasn’t been peer-reviewed and doesn’t include data on Medicaid patients, who comprise most long-term nursing home residents. The paper is “inconsistent with recent peer-reviewed academic research that shows that private equity-backed companies are delivering high-quality care to nursing home residents, particularly during the COVID-19 crisis,” it said.

One subcommittee member spoke in favor of the for-profit healthcare system. Rep. Tom Suozzi (D-NY 3rd District) said “I’m not against making money as long as you are taking care of your patients.”

Senate Special Committee on Aging: COVID-19 One Year Later: Addressing Health Care Needs for At-Risk Americans

On March 18, the Senate Special Committee on Aging, chaired by Sen. Bob Casey (D-PA), held the hearing “COVID-19 One Year Later: Addressing the Health Care Needs for At-Risk Americans.” Much of this hearing focused on the disparities in care during the pandemic. Speakers noted the virus had a disproportionate impact on the elderly, people with disabilities, minorities, and rural Americans. While this hearing was not focused on seniors housing or skilled nursing, private equity investment in long-term care was brought up and questions were posed regarding its suitability for the sector.

Comments highlighted the two different types of patients that are found in skilled nursing, and how they don’t necessarily align with each other. Anthony Jackson, senior vice president and chief operating officer of Roper Saint Francis Healthcare, and a former nursing home administrator said “When you look at the viability of a nursing home, they started to move away from the responsibility for which they exist, which is to take care of patients from a long-term perspective. They moved toward taking care of short-term types of disease which provides for quicker turnover and a better reimbursement.”

On HCBS services, Senator Elizabeth Warren (D-MA) said “…the coronavirus has also highlighted the critical importance of providing care safely in home and communities. Here’s the problem: Millions of Americans can’t access HCBS services at home. … We must make HCBS a mandatory benefit in Medicaid and expand Medicare to cover more at-home, long-term care services.” Following this hearing, the American Jobs Plan was announced, which includes $400 billion to expand access to Medicaid home and community-based services.

House Ways and Means Oversight Subcommittee: Examining Private Equity’s Expanded Role in the U.S. Health Care System

A week later, on March 25, the House Ways and Means Oversight subcommittee, chaired by Rep. Bill Pascrell (D-NJ 9th District) held the hearing “Examining Private Equity’s Expanded Role in the U.S. Health Care System.” Skilled nursing and private equity ownership were the central themes for this hearing, again citing the February 2021 National Bureau of Economic Research (NBER) study. Ernest Tosh, an attorney specializing in nursing home abuse and neglect highlighted what he considers to be a lack of transparency in for-profit skilled nursing chains’ use of taxpayer funds. Tosh said “We really have no idea what the financial position of these facilities is. They can be made to look bankrupt, but, in fact, may be making millions and millions of dollars each.” Tosh proposes requiring skilled nursing operators to file consolidated financial statements for entire chains, not just individual properties.

In anticipation of another congressional hearing scrutinizing the sector, AHCA/NCAL’s CEO and President Mark Parkinson proactively released a statement before the hearing highlighting both the shortcomings of government funding coverage and the limited role of private equity within the ownership of skilled nursing properties. Parkinson said “In the long-term care sector, private equity companies own less than 10 percent of nursing homes, and large investor acquisitions are decreasing. However, the small number of nursing homes that have turned to alternative revenue sources underscore the financial and staffing crisis that nursing homes are facing due to the fact that Medicaid does not cover the cost of care.”

Senate Finance Committee Confirmation Hearings: CMS Administrator Chiquita Brooks-LaSure and HHS Director Andrea Palm

On April 15, the Senate Committee on Finance held a confirmation hearing for both the CMS Administrator and the HHS Director, which covered applicable topics of Medicare and Medicaid funding and reform, telehealth, staffing, oversight, and penalty changes for skilled nursing properties.

Senator Mike Crapo’s (R-ID) opening statement on both Brooks-LaSure and Palm touched on the topic of telehealth. “Patients and providers have benefited from expanded access to telehealth and expedited approval of COVID-19 vaccines, diagnostics, and treatments. Going forward, Medicare and Medicaid patients must have the same access to innovative items and services as those with commercial insurance.” Several other senators highlighted the need to ensure that the telehealth boom that started during the pandemic continued. In response, Brooks-LaSure said that she wants to examine what CMS’s authority is to extend the flexibilities that are set to expire at the end of the public health emergency.

Senator Bill Cassidy (R-LA) also commented that “We both know we spend lots of money on duals, and we get miserable outcomes. … One of the issues is that it is difficult for aligning incentives for both state and federal governments.” Brooks-LaSure responded that there needs to be better coordination between long-term care, nursing homes, and hospitals.

The hearing did not highlight any major opposition to either nomination, and likely signals the confirmation of each to their respective roles at CMS and HHS.

 

About Ryan Brooks

Senior Principal Ryan Brooks works with the research team in providing research, analysis, and contributions in the areas of healthcare collaboration and partnerships, telemedicine implementation, EHR optimization, and value-based care transition. Prior to joining NIC, he served as Clinical Administrator for multiple service lines within the Johns Hopkins Health System, where he focused on patient throughput strategies, regulatory compliance, and lean deployment throughout the organization. Brooks received his Bachelor’s in Health Services Administration from James Madison University and his Master’s in Business Administration from the University of Maryland.

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