Nursing Homes' Push to Make Money Can Clash with Patient Needs - Southern Maryland Headline News

Nursing Homes' Push to Make Money Can Clash with Patient Needs

This story is part of the CNS Investigates series "DISCHARGING TROUBLE: In Maryland, uneven oversight of nursing homes allows some patients to slip through the cracks."

HYATTSVILLE, Md. (Oct. 5, 2016)—A bottom-line mentality in modern nursing home chains is clashing with a creaky regulatory system, a mixture that can leave vulnerable patients in unlicensed assisted-living facilities that are often inadequate and sometimes dangerous.

Consider the stories of Vonda Wagner and Andrew Edwards, who were both discharged from NMS Healthcare facilities in Maryland into unlicensed assisted-living facilities, where they said they were assaulted and robbed, according to court records and interviews.

NMS Chief Operating Officer Mark Yost said he felt "horrible" about what happened to Wagner and Edwards but can only control what happens within NMS facilities. The company stopped doing business with the unlicensed assisted-living operator, Sharon Isaac, after it learned of the Wagner and Edwards cases from a Baltimore police investigator, he said.

While the charges of assault and robbery are unusual, the business forces behind Wagner's and Edwards' discharges are not. NMS' Yost provided a window into the modern nursing home business in a wide-ranging interview, addressing criticism addressed at his company and the industry in general. He said NMS, which operates five nursing homes in Maryland, commonly discharges patients when they do not have sufficient income to pay. That's because NMS has to "protect" itself because it needs to pay its employees and cannot sustain patients who are not paying, he said.

"You can look at it and say, 'Well, wow, that's just a horrible nursing home. Look at them, they're discharging people,'" he said. "But, quite frankly, we have a duty here to pay our employees, and in order to pay our employees, we need patients in our beds that are paying. And quite frankly, I can't excuse the Medicaid process. I can't excuse the insurance process. And that's where the problem is. I'm not discharging a patient that's paying."

Consumer activists and some regulators say NMS and other nursing homes are discharging patients when their more lucrative but short-term Medicare benefits expire. Nationally, Medicare pays about $13,809 a month, far more than the average Maryland Medicaid reimbursement rate of $7,404. NMS discharges more patients than the average nursing home in Maryland, or even nationwide, a practice consumer advocates say allows the company to boost its revenues but leaves vulnerable patients with few options.

"Our feeling—and I say that nicely—is that they [at NMS] don't want long-term residents," said Eileen Bennett, the Montgomery County Long Term Care Ombudsman Program manager. "They only want to serve people who are turnover, under Medicare. That's our sense of who they want in their nursing home setting."

Yost acknowledged the turnover but noted other factors in their decision making process. He said NMS accepts the sick and low-income patients often rejected by other nursing homes. NMS's intake financial screening process is less rigorous, he said, and the company doesn't shy away from residents with high levels of needs, such as ventilator or dialysis care. That is part of the philosophy of the company, founded in 2004 by former social work administrator Matthew Neiswanger, Yost said. Neiswanger, for example, established an HIV/AIDS treatment ward at another nursing facility before starting NMS, according to Yost.

"He believed that: 'Okay, that's a niche I can fill. I'm not afraid of that level of acuity, or that level of sickness, so let me try to help those patients,'" Yost said. "He brought that philosophy when he started [NMS]."

Capital News Service obtained records showing NMS, on a per bed basis, had the most requests for discharge hearings among major nursing home groups in Maryland. A review of Maryland Office of Administrative Hearings data shows NMS patients filed 103 administrative hearing requests in the last five years over nursing home discharge disputes. NMS had 13 requests for hearings per 100 beds, double the rate of the nearest competitor. The rate of NMS patients seeking discharge hearings was six times the state median rate of two hearing requests per 100 beds, according to a CNS analysis.

Reacting to the CNS findings, Yost said the number of appeals "is not indicative of any wrongful action by NMS."

"In fact, it shows that our residents are utilizing their rights to request hearings in accordance with the law," Yost said in an email. "NMS defends its records and follows the relevant regulations with regards to the discharge of residents."

Data on the national level paints a similar trend. An average of 65 percent of NMS patients on Medicare were discharged in 2014 versus a national average of 42 percent, according to a Capital News Service analysis of Centers for Medicare & Medicaid Services data. The Maryland statewide average was 57 percent. Yost did not challenge the Capital News Service findings, except to note that NMS won a vast majority of the discharge hearing appeals.

According to Yost, NMS's discharge of numerous nursing home patients is rooted in a more fundamental problem: Maryland's complex Medicaid application process causes lengthy delays in payment to nursing homes.

"We would not have to discharge anywhere near the number of folks that we do if it weren't for the difficulties with the Maryland Medicaid program and getting approvals," Yost said in an hour-long interview. "I've been involved in long-term care for the last 15 years, and nothing has improved."

One industry analyst, Toby Wann of Obsidian Research Group, does not find NMS's behavior unusual.

"I would say that it is pretty standard practice when somebody exhausts their benefit for days in a skilled nursing facility, that they get discharged," Wann said. "It's the unfortunate underbelly, if you will, of the industry … You can't keep a patient in a facility without getting reimbursed for it because there's costs associated with that."

While it may be standard industry practice, some of the discharges have led to serious problems, such as the Wagner and Edwards cases. Both Wagner and Edwards are pursuing criminal assault and theft charges against Isaac, owner of Isaac Supportive Living Service LLC. In March, the Office of Health Care Quality ordered Isaac to produce an assisted-living license for her business or move people out. Isaac, in a February interview, denied the assault and robbery allegations. She described her business as a "supportive living service" operating at two properties in West Baltimore since 2007. She declined later interview requests from Capital News Service to answer regulatory questions about her facilities.

Advocates for nursing home residents such as Bennett said NMS's discharge practices are unusual and questioned whether residents are always placed in safe and secure environments after leaving the nursing homes.

Wann said skilled nursing is a tough business because "it's not a hugely profitable business from a reimbursement standpoint, and you get a lot of very sick patients that, you know, unfortunately, don't get better." Nationwide, skilled nursing facilities had revenues of $123.5 billion in 2014, and they grew at an annual rate of 4.6 percent in 2014, according to a Plunkett Research Ltd. industry report.

Yost maintained that the company's goal is not to have a revolving door for Medicare patients. He said NMS's focus on rehabilitative care, and getting residents out of the nursing home setting as quickly as possible, is beneficial.

NMS begins talking with patients about applying for Medicaid at or after the patient is admitted, and has four lawyers who work full-time on the Medicaid approval process, including securing guardianship for patients who are unable to work through the application process themselves because of their health conditions, Yost said.

"We are aggressive with getting people approved for Medicaid," he said. "We start day one from when they're in here, when they sign the contract for admission, telling them they need to apply for Medicaid."

Andrew Applegate, executive director of Asbury Solomons in the southern Maryland community of Solomons, whose facility did not have a complaint or mediation filed against it during the five years of data reviewed by Capital News Service, said his skilled nursing facility begins discussing a discharge plan with patients on their first day that is in line with the patient's long-term goals.

"We don't want to be starting to talk about discharge and then not be prepared, because there's financial consequences for the resident," he said. Applegate said the only time he could see patients being discharged involuntarily from his facility would be after nonpayment, or failure to even try to apply for Medicaid.

The Asbury Solomons facility has the top five-star rating under Medicare's Nursing Home Compare rating system. By contrast, NMS Healthcare of Hyattsville and NMS Healthcare of Annapolis both have four-star ratings. Three of the NMS facilities—NMS Healthcare of Hagerstown, NMS Healthcare of Silver Spring and NMS Healthcare of Springbrook—have two-star ratings from Medicare.

Aside from NMS's discharge practices, the company has an unusual regulatory history.

The Centers for Medicare & Medicaid in 2012 declared NMS Healthcare of Hyattsville a "Special Focus Facility," which subjects a nursing home to intensive inspection because they had a "history of serious quality issues." NMS appealed this designation to the Centers for Medicare & Medicaid Services and won a retroactive reversal, Yost said.

"There was never a doubt that this facility shouldn't have been on that list to begin with," Yost said. "The Office of Health Care Quality overstepped their bounds, and it really should have never happened."

NMS was removed from the Special Focus Facility list after fulfilling requirements for removal, said Lorraine Ryan, a spokeswoman for Centers for Medicare & Medicaid Services. NMS had no severe deficiencies or complaints for two consecutive inspections, she wrote in an email.

Capital News Service reporters Catherine Sheffo, Daniel Trielli and Darcy Costello contributed to this story.

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