Ownership and Accountability Matter

Private equity funds owning nursing homes can have several negative implications for the quality of care and well-being of the residents. Care from for-profit private equity firm provide lower quality of care, and more abuse and neglect as a result. The rate of serious medical complications increase after they were purchased by private equity investment firms. The study, published in JAMA, found that adverse events including surgical infections and bed sores rose by 25 percent.

But on Jan. 19, the OIG took a specific stance with regard to updates in its assessment of nursing homes and nursing home fraud, per updated guidance on oversight by the OIG. Healthcare providers reimbursed a historic $2.7 billion to resolve federal False Claims Act allegations last year.

Among the 2023 cases highlighted was a settlement in which the owners of Saratoga Center for Rehabilitation and Skilled Nursing Care paid $7.1 million for providing “worthless services” to residents over four years of mismanagement and fraudulent billing.

The latest transparency rule finalized in November establishes definitions of private equity and real estate investment trusts for reporting purposes. Unfortunately, real estate sales followed by lease backs, management fees, and the establishment of related parties to do business under the same corporate umbrella — are now widely practiced by all private owners. Profits over people.

“Critics of PE acquisitions note that these firms typically have little experience in the provision of care and seek short-term profits over patient health interests,” the November HHS brief noted.

Federal officials have announced they will terminate Medicare payments to Viviant Healthcare of Bristol, TN. Two Vivant facilities in South Carolina were transferred to the Ensign Group after receivership.  Local media outlined a systemic failure to pay vendors and equip other Viviant facilities with supplies needed by staff and residents, a practice that documents indicate went up the chain to owners.