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House OKs Bill to Open Private Nursing Facilities’ Finances to the Public

by Christine Stuart | Apr 29, 2014 8:56pm
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Posted to: Business, Corporate Watch, FOIA, Health Care, Jobs, Labor

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Rep. Cathy Abercrombie, D-Meriden

The House passed legislation Tuesday that would require about 154 for-profit nursing home companies to share more financial information with the state.

The bill proposed by Democratic Gov. Dannel P. Malloy acknowledges the troubles that SEIU 1199 — one of the state’s largest healthcare unions — had with at least two nursing home chains in the past decade. The bill, which passed 86-57, seeks to get these private skilled nursing facilities to share more of their financial information with state officials.

The amended bill seeks the profit and loss statements for any business that does more than $50,000 of business with a nursing home. It also reinstates the Nursing Home Financial Advisory Committee.

Deborah Chernoff, policy director of SEIU 1199, said essentially nursing home chains are vertically integrated businesses. She said the nursing home itself may not make money, in fact it may lose money, but you can send a stream of revenue to your management company, to your pharmaceutical company, and to your therapy agency.

She said it’s difficult to assess whether the nursing home needs a Medicaid rate increase if the state can’t take a look at the finances of these other businesses. She said if a nursing home doesn’t want to have to disclose, then they don’t have to take public Medicaid dollars.

The Connecticut Association of Healthcare Facilities, headed by Matthew Barrett, opposed the legislation.

The bill “will put into the hands of nursing home competitors sensitive and private business records,” Barrett said in March, adding “that there is no other example of this anywhere in Connecticut state government. The record is also very clear that the bill will put into the hands of Connecticut labor unions private business records that they will exploit for their own purposes.”

Barrett said they are trying to work on an amendment with the Senate to increase the contract amount to $100,000 and to make the profit and loss statements available only if the nursing home is in receivership or bankruptcy.

Most of the Republican lawmakers in the House who debated the bill for close to nine hours Tuesday agreed with Barrett. For them, the bill represented everything that was wrong with state government when it comes to private companies and their ability to conduct their business in the state.

Rep. Terrie Wood, R-Darien, said it seems that they often write legislation to address the actions of a few bad actors. She added that she’s only aware of two nursing home chains that have filed for bankruptcy and did not have to disclose the assets of the related businesses.

“We’re writing legislation that’s a very broad stroke and I’m not sure we’ll have the intended . . . I’m not sure this is a reason to support this,” Wood said.

Rep. Cathy Abercrombie, D-Meriden, didn’t disagree that experience was the reason behind the legislation.

Wood, the ranking Republican on Human Services, said there has to be a better way to hold nursing home chains accountable.

Abercrombie said they want to make sure the existing nursing homes can remain viable as the state undergoes a transition to get aging and disabled residents more support in their own homes.

“This isn’t just about dollars and cents,” Abercrombie said. “This is also making sure that people in those homes have a home to stay in.”

Wood and her colleagues wondered why Department of Social Services Commissioner Roderick Bremby opposed similar legislation. Unable to get an answer out of Democratic colleagues, Wood opined it was because it would create more paperwork for the state agency.

“He testified this year that he is in favor of this additional reporting,” Abercrombie said.

Wood still wasn’t convinced.

“I think so often in here we write legislation to solve a perceived problem and I’m just not convinced at all that this piece of legislation is going to solve the problem of people who own nursing homes who are falsely channeling bigger expenses off related businesses,” Wood said.

Rep. Jason Perillo, R-Shelton, wanted to know if those profit and loss statements would then become available under Freedom of Information for the public to see.

“If you have an LLC . . . all of that income runs through your statement. That’s your life. That’s your financial existence,” Perillo said. “Your financial life, everything you do is now open to public scrutiny.”

Abercrombie said Perillo is correct in pointing out the financial information would be available to the public.

House Speaker Brendan Sharkey, said that “with over $1.5 billion of taxpayer money going to nursing homes in Connecticut each year, we should know how those dollars are being used and where they are going.”

“There are almost 200 for-profit, taxpayer funded nursing homes in Connecticut that are in the business of caring for our parents and grandparents, yet their balance sheets are a mystery,” he added in a statement after the vote.

The bill is headed to the Senate, but it’s fate is uncertain.

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