October 17,2007

Grassley, Baucus ask about oversight and operation of nursing homes taken over by large private investment firms

WASHINGTON --- Sens. Chuck Grassley and Max Baucus are asking the federal agency responsible for overseeing nursing home inspections to account for a report of higher health and safety violations in nursing homes that have been bought by private equity investors. The senators are also asking individual private equity firms about their management of nursing homes.

The senators’ inquiry stems from a New York Times investigative story in September that described higher numbers of serious health and safety deficiencies in nursing homes that have been taken over by large private investment firms.

“The Centers for Medicare and Medicaid Services needs to do everything it can to make sure nursing home quality of care meets proper standards, no matter what,” Grassley said. “It’s also important for policy makers and regulators to understand fully the effect of this emerging ownership structure on nursing home residents. Profits of investors cannot be put ahead of providing quality care.”

“Nursing homes aren’t just investment vehicles. They’re homes for some of America’s most vulnerable citizens. The level of care at a nursing home must not be determined by the profit requirements of anonymous investors,” said Baucus. “Investor-owned facilities are by no means exempt from proper standards of care for seniors and the disabled. As the trend of investor-owned nursing homes grows, I want to know how CMS plans to ensure the health of patients, including those covered by Medicare and Medicaid.”

The Centers for Medicare and Medicaid Services is charged with overseeing state-level inspections of nursing homes and ensuring that federal standards for quality of care are met.

The vast majority of nursing home expenses are paid for by Medicaid and Medicare. The Senate Committee on Finance - where Baucus is Chairman and Grassley is Ranking Member - has legislative and oversight responsibility for these programs.

The text of the senators' letter to the Centers for Medicare and Medicaid Services is below, along with the text of the letters they sent to five private equity firms. The September 23, 2007 New York Times story is copy-pasted below the letters.