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Stricter Inspections Compound Nursing Home Problems.

WHILE FEDERAL OFFICIALS strengthen nursing home inspection guidelines to curb resident abuse, some Arkansas home operators fear the weight of new regulations will push the industry toward a financial meltdown.

The industry is facing a financial crisis, says Jim Campbell, CEO of the Riley Co., an Arkansas nursing home operator, and "they think harder surveys will fix the problems."

Inspections are a way to weed out bad operators who leave a black eye on an industry concerned with providing quality care, says one nursing home operator. At the same time, though, operators talk of an adversarial relationship with some inspectors who they say seem out to get the homes even over minor problems.

Since 1998, the federal government has sought to toughen oversight of nursing homes through some new instructions for the agencies, like Arkansas' Office of Long Term Care, which inspect nursing homes. According to government auditors, nearly a fourth of the country's nursing homes are deficient in meeting national quality standards. In Arkansas, the Office of Long Term Care's acting director says there are "significant" compliance issues on many of the regular surveys conducted at the roughly 240 nursing homes in the state.

In December, the U.S. Health Care Financing Administration, which administers Medicare and oversees state Medicaid programs that pay for the care of most nursing home residents, tightened inspection rules to include more situations that might result in immediate sanctions. States also were given more authority to notify nursing homes that they will be denied payments for new admissions if they fail to meet health and safety guidelines.

Earlier in 1999, HCFA advised state officials to investigate complaints of resident injury quicker. Also, nursing homes could be subject to $10,000 fines for each incident that threatens residents' health, rather than fines based on the number of days a nursing home fails to meet requirements.

The initiative started in late 1998 with a call for more frequent inspections of "repeat offenders." State inspectors were also given the green light to visit homes on weekends and at night to look for quality, safety and staffing problems.

The Clinton administration recently asked for more money to train new inspectors. Carol Shockley, acting director of the Office of Long Term Care, says Arkansas needs more than the current 54 inspectors who conduct the surveys.

"I think the nursing home initiative has placed an emphasis on the inspection process that needs to be placed," Shockley says. "We hope it increases the number of surveyors and our ability to do more inspections and be more responsive to complaints."

Complaints and Penalties

Those complaints can range from the minor to major and can carry penalties ranging from fines to termination of a facility's Medicaid and/or Medicare certification, which denies them payments from the programs until the deficiency is cleared. Some of the penalties are triggered automatically, Shockley says, depending on the severity of the deficiency.

Most of the state's nursing homes receive one standard survey annually, she says. If the survey finds violations, a followup survey is conducted, followed by another if the "noncompliance" continues. Some troubled facilities could see surveyors as many as eight times in a year, Shockley says.

Rick Lorence, corporate counsel for Rose Care Inc., says no matter what the rules are, the inspections need more consistency. Rose Care operates 19 nursing homes in Arkansas, and Lorence says not all inspectors conduct surveys in the same way. Some are helpful and work to help owners meet requirements, he says, but some are more adversarial.

Pat Riley, owner of the Riley Co., agrees. Most inspectors used to be more constructive with criticism, he says.

"The change that has occurred," Riley says, "[is] it's almost like there's someone there to persecute you sometimes."

He points to a recent situation at Riley's Oak Hill Manor North in North Little Rock tat started as a deficiency for having coffee too hot after a resident was burned. There was no family or resident complaint, he says, but the incident was noticed by a surveyor.

The fine for the coffee was removed after the company showed it had recently changed coffee suppliers, he says. Then surveyors went back and imposed a fine for an incident where a resident walked out of the front door of the home while the receptionist. was in the restroom, he says.

The resident was found unharmed within an hour and returned, he says.

Beverly Enterprises Inc. of Fort Smith, the country's largest nursing home operator, has also registered its displeasure with the inspection system. Dan Springer, a Beverly. spokesman, has called the inspection system punitive and inherently flawed.

Arkansas authorities shut down a Beverly facility in 1998 following the investigation into the death of resident at Beverly Health and Rehabilitation Center in Jacksonville.

Industry Problems

Campbell, chief executive officer of the Riley Co., says the industry's problems are much greater than the inspection issue. Stagnant Medicaid reimbursements and a change in the Medicare payment system coupled with Medicare payment reductions in the federal Balanced Budget Act of 1999 have hurt nursing homes nationwide, he says.

Tougher regulations, such as legislation passed last year by the Arkansas General Assembly requiring increased staffing at nursing homes, carries a price tag as well. Nursing home operators are forced to address staffing needs while there is a shortage of qualified personnel and less money to pay them, Campbell says.

Arkansas' Medicaid per diem rate is among the lowest in the nation, according to Campbell, and hasn't seen an increase in three years. On average, every nursing home in the state is losing money on Medicaid patients, which are the bulk of nursing home residents, he says. If nothing is done, facilities will start to go bankrupt, he predicts.

Already the financial problems are hitting the industry nationally. Last week, Mariner Post-Acute Network of Atlanta, the country's second largest nursing home operator, was reportedly set to ask for Chapter 11 bankruptcy protection. The company, which operates 404 homes across the nation (but none in Arkansas), reported that earnings were down more than $1.5 billion in the fiscal year ended September 1999.

If the filing occurs, it would be the third large long-term care chain to seek bankruptcy protection in the past six months.

In the quarter ended September 1999, Beverly Enterprises reported net income just over a third of what it was the year before. In 1999, Beverly reached a settlement with the U.S. Justice Department in an investigation of its Medicare practices and saw its stock price drop 35 percent.

As for the money being requested for additional inspectors, Campbell wishes "they could put it in wage enhancements and we could hire more staff to meet the requirements they're holding us to."

Asked about industry gripes that some inspectors are antagonistic, Shockley says she can't speak to personalities. "Our goal is to have consistency in surveys and between surveyors," she says, "and in every form of training we provide -- which is considerable -- we strive for consistency and to have them know the regulations and apply the regulations consistently on all surveys."

Resident Advocates

Other interested parties in the debate are resident advocates such as the Arkansas Advocates for Nursing Home Residents. Many of the members have or have had relatives, in the state's nursing homes, and the group lobbied hard for. staffing legislation in the 1999 legislative session.

Virginia Cross, vice president of Arkansas Advocates for Nursing Home Residents, says she's pleased to see the tougher inspection standards. Enforcement of regulations makes a difference in nursing home quality, she says, but those inspection agencies have not had enough inspectors to ensure fast and sure investigations.

"The fact is," she says, "because Arkansas' minimum staffing requirement is so low, it makes homes just a bit over the minimum look good, they are still, inadequate."

Randy Wyatt, the new executive director of the Arkansas Health Care Association, a nursing home industry group, says the group's membership favors "fair and equitable inspection standards." The AHCA says it advocates "zero tolerance for abusive and neglectful treatment in our nursing homes."

"Our goal is to provide quality care at the best price," he says, "Whatever the regulations are, we'll abide by them."
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Comment:Stricter Inspections Compound Nursing Home Problems.
Publication:Arkansas Business
Geographic Code:1USA
Date:Jan 24, 2000
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