Waste or Fraud?

NC Health News article explains the typical problems wth nursing homes. Writer Thomas Goldsmith does a good job dissecting the complex organizational structures of the owner and operator corporations and management companies that control and mismanage nursing home facilities. Goldsmith describes this business structure as “byzantine” and wasteful. The owner/operators siphon taxpayer funds to related sham Limited Liability Corporation (LLCs) who provide no services to the residents.

These organizations also make facilities pay rent. The owner leases the property to the LLC with the license to operate the nursing home. ATI data found HUD insured more than 2,300 active mortgages in 2019. HUD Section 232 guaranteed $4.9 billion in loans in 2021 alone – more than half of this funding was for nursing homes.

The same owner/operator will pay a related entity that provides “consulting” services to the nursing home. In reality, they control the facility through budget “recommendations” that do not allow the facility to staff at safe levels.

Goldsmith uses figures from the NC Fiscal Division to exhibit just how much money is being spent on Medicaid in skilled nursing homes. Much of it does not go toward patient care. A full-scale report posted by the National Academy of Sciences, Engineering, and Medicine
named “National Imperative to Improve Nursing Home Quality” reveals the necessity to refine the nursing home transparency standards.

This report arose from an incident at The Oaks at Sweeten Creek in September 2020. On September 16th, a staff member tested positive for COVID-19. The nursing home waited 8 days before testing the residents for COVID-19. Throughout the next 4 weeks, 53 residents and 18 staff members tested positive at the Oaks at Sweeten Creek, and by mid to late October, five residents had died.

This convoluted process then leaves the vulnerable adults with poor quality of care, and no remedy when neglected. It is a shame. We can do better as a society. We certainly pay enough taxes to take care of the most vulnerable among us.