Lawmakers want more accountability from nursing homes, but will industry unite behind payment system?

Carlos Guillermo Smith presses for the bottom line of legal costs.

As the nursing home industry asks lawmakers for hundreds of millions in additional funds and seeks protections from COVID-19 related lawsuits, there is growing momentum in the Capitol for greater scrutiny over how Florida’s nursing homes spend $4 billion annually.

The Republican-controlled Legislature is moving bills to require Florida nursing homes and their home offices to submit audited financial statements with the state.

But Sen. Audrey Gibson and Rep. Carlos Guillermo Smith want to go beyond increasing financial transparency at Florida’s 690 skilled nursing facilities. They have filed legislation (SB 1596 and HB 1237) that requires nursing homes to direct 75% of the Medicaid payments they receive to direct patient care.

The bills also place a cap on executive salaries. Nursing homes would not be able to use more than 15% of their total expenses funded through the Medicaid program on executive salaries and earnings.

“By doing this we will ensure … that those nursing homes are actually spending the $4 billion in taxpayer money that Floridians give them every year, they are spending it on actually caring for our seniors,” Smith said Thursday at a news conference. He and Gibson were joined by representatives of AARP Florida and United Healthcare Workers East 1199 SEIU, which published a case study of Consulate Health Care, A Crisis of Their Own Making.

Florida Health Care Association spokesperson Kristen Knapp said the comments amounted to “sound bites that sound great.” But she said the prospective payment system which the state adopted to use to set Medicaid rates takes quality of care into consideration. “If you are not making continuous quality improvements, your rates are reduced,” she told Florida Politics.

But Steve Bahmer, president and CEO of LeadingAge Florida, agrees with Gibson and Smith that there is no accountability in the rates. LeadingAge represents mission-driven nursing facilities, continuing care retirement communities and assisted living facilities.

A medical loss ratio is one way to increase accountability, but it’s not the only way. Bahmer said the Legislature also could increase accountability by improving how the rates are currently formulated.

“Billions of taxpayer dollars are spent each year on Medicaid reimbursement for Florida nursing homes, and it’s reasonable to expect that those dollars result in the delivery of the highest possible quality of care for Florida seniors,” Bahmer said in an email. “One of our primary concerns with the reimbursement system put into place in 2017 has been that it does not provide accountability for how Medicaid funds are spent.”

The remarks harken back to the 2017 Legislative Session and a bruising battle over the so-called prospective payment system (PPS).

Prior to adoption of the PPS system, the state used cost reports and rates were set retrospectively. But the FHCA pushed the Legislature to adopt a system where reimbursement rates are determined in advance of payment.

Lawmakers required that the change from a cost-based system to a PPS system had to be cost-neutral.

“It shifted millions of dollars from high-cost and high-quality providers who invested more in patient care. And that shift occurred without any requirement that those new dollars providers received had to be spent on care,” Bahmer said. “Our argument at the time was, and remains to this day, that providers should be accountable for how Medicaid dollars are spent, and the system needs to be improved to ensure that accountability.”

The PPS plan was adamantly opposed by LeadingAge Florida and was championed by the Florida Health Care Association. Consulate Health Care facilities benefitted from the switch in payment.

Meanwhile, the AARP and the SEIU also have come out in support of Gibson and Smith’s legislation.

AARP Florida Associate State Director for Advocacy Zayne Smith said transparency and accountability are key, and said the bills should have bipartisan support.

“It’s a win for the residents, it’s a win for the most vulnerable, the residents in Florida. It’s a win for the workforce and, frankly, it’s a win for the nursing homes to do the right thing and to place the emphasis on care, not profit.”