Every nursing home should be legally and financially responsible for what happens to its vulnerable residents. But nursing home owners are too often missing in action. They avoid legal liability by structuring ownership interests in ways so convoluted that it is often impossible to hold anyone accountable. And with that lack of accountability has come deteriorating care. The situation has long been known by government regulators and consumer advocates, but it wasn't until passage of President Barack Obama's health care reform that federal law seriously began to address the issue. The Affordable Care Act forces more transparency on nursing home owners in ways that should help protect Florida's elderly.
Tampa Bay Times staff writer Stephen Nohlgren recently examined one egregious case of a nursing home using elaborately layered ownership to evade lawsuits for abuse and neglect. After 92-year-old Elvira Nunziata died in 2004 when she fell down a stairwell of her Pinellas Park nursing home while tied to her wheelchair, her son sued for wrongful death. Last month, a jury awarded him $200 million. But the defendant in the case and the company that operated Pinellas Park Care and Rehab Center no longer existed by the time the verdict was rendered. Multiple companies that once had either operational or ownership interests also disappeared.
This is not a unique case. For-profit nursing homes play a corporate shell game by slicing themselves into pieces. One limited liability company may own the facility's real estate, another may operate the facility, and another may own some of its assets. A federal investigation found as many as 17 companies involved in a single nursing home. Private equity firms, hedge funds and banks are often at the end of this line. They take money out of nursing homes but claim not to be responsible for operations or levels of care.
The problem is how difficult it is to penetrate this web of companies and hold the real owners accountable. While facilities that take federal funds are already required to report their ownership chains, the information submitted is often too vague and incomplete to be helpful, according to the Government Accountability Office.
That should soon change under the nursing home transparency provisions of the Affordable Care Act. New rules, to be finalized soon, would require exhaustive reporting of nursing home ownership, management and financial connections. All such information would then be disclosed to the public, as well as a range of new details about the way each nursing home operates, including staffing levels and turnover rates. Consumers would be able to check the government's Nursing Home Compare website to identify red flags in quality of care.
Ultimately, tighter rules may be needed to tie the real owners of nursing homes to any wrongdoing committed within their facilities, but requiring full transparency of the owner/operator shell game is a good place to start.