Nursing homes spent big on Ohio politics. They could be in for a big Medicaid boost


Ohio lawmakers are considering legislation that could send hundreds of millions in extra funds to Ohio’s nursing home industry – a political powerhouse that says its facilities are underwater.

House Republican leaders haven’t shared details about the size or shape of the package.Industry officials say the money is desperately needed to ensure quality of care as nursing homes deal with rising labor costs, pandemic-driven increases in costs of care, supply chain snarls, and staffing shortfalls.

The money would flow to an industry heavily reliant on state and federal dollars that’s backed by a hefty political machine. Sixteen lobbyists are registered in Ohio on behalf of three industry trade associations, not to mention some large chains that employ their own lobbyists.

Meanwhile, industry PACs and individual facility operators contributed more than $1.4 million to state races during the 2021-2022 campaign cycle alone, almost entirely to Republicans who rule Ohio with trifecta control of state government and supermajorities in both chambers of the General Assembly. A political nonprofit operated by one of the organizations spent $1.7 million during the 2019-2020 cycle, the most recent data available.

The COVID-19 pandemic hit the nursing home industry hard. It sparked deadly outbreaks, increased costs, drove unflattering media attention, and accelerated a shift toward home-based care for older Americans. The virus itself spread swiftly through communal settings like nursing homes and posed a grave threat to their older and infirmed population.

While most homes struggled with outbreaks, regulatory inspections show more than three dozen Ohio facilities allegedly placed the welfare of their residents in “immediate jeopardy” during the pandemic. Inspectors alleged poor standards of care and infection control preceded more than 80 resident deaths around the state from COVID-19.

The Medicaid program spends around $7.6 billion a year on Ohio’s nursing homes, according to from Miami University. Last year, state lawmakers provided facilities an additional $300 million in coronavirus relief funds to address rising labor costs, with the caveat that the money goes to caregivers like nurses instead of owners and operators.

GOP House Speaker Bob Cupp said Wednesday the House is now “considering seriously” passing legislation to provide more funds for facilities to adjust for inflation. House Majority Leader Bill Seitz said the appropriation would focus only on costs of direct care but didn’t specify a price tag.

On a longer term basis, the three trade organizations have jointly proposed a series of policies that would increase their funding while incentivizing certain quality of care measures and private rooms for residents.

The quality-of-care incentives in current law have been weak, said Roger King, a lobbyist with the Academy of Senior Health Sciences, which represents about 150 facilities. But he said homes have been underfunded for 15 years, which yields substandard care. Proper funding and new, more “meaningful” incentives, he said, would produce better-quality nursing homes. They might not cover every gap exposed during the pandemic, but they’re a step in the right direction.

“More funding is appropriate,” he said. “There’s no doubt about that. The question is: how do we fund more, and try to accomplish better outcomes and better care for people in facilities?”

Costs, especially labor, have skyrocketed since 2019, the base year for calculating cost reimbursement, according to Pete Van Runkle, a lobbyist and director of the Ohio Health Care Association, which represents about 1,200 long term care providers. He said facilities need sustainable, not just one-time, funding.

“We have not seen this kind of an inflationary environment in 40 years, so we need rates to react to the costs changes. Our members are seriously upside-down,” he said.

Some of the ideas and rationale sound nice, but there’s not enough serious follow-up to ensure new money produces better care outcomes and actually makes it to workers, according to Loren Anthes, a fellow at the Center for Community Solutions think tank with a specialty in Medicaid policy.

“We’ve had a system in Ohio, for a long time, where we have premised the needs and interest of the industry over the needs and interests of customers,” Anthes said. “And what are we doing to address these incident reports, that are pretty alarming?”

An AARP spokesman said the organization supports any legislation that increases nursing home funding, which often precedes better quality. But Erin Pettegrew, a deputy in the state long term care ombudsman’s office, said complaints from residents are still coming in frequently and she’d like more information about the financial status of the facilities before backing more funding.

And nursing homes are only one option for older people. Beth Kowalczyk is the policy director of O4A, which represents county agencies around the state that help older Ohioans find home and community-based care instead of nursing homes. She said low wages, driven by low Medicaid reimbursement rates, have forced providers out of the market.

Nursing homes may need more money, but so do home and community-based care providers – an industry that could dry up without more funding.

“We’re going to be left out, and people will not have those options,” she said. “They’ll either be forced to decide to live in a nursing home because there’s no other option, or they stay at home without help and possibly wind up in a hospital.”

Robert Applebaum, who researches gerontology in Ohio at Miami University, largely agreed. More funding is prudent, he said, but should be strategic based on what facilities and beds the state still needs given decreasing demand for nursing care. And home-based care shouldn’t be left behind.

The money

The GOP lobbyist and powerbroker Neil Clark represented the OHCA for years. In his posthumous 2021 memoir, he likened Ohio’s nursing home industry to 500 ATMs around the state: politicians can walk up, punch a number, and take out cash as they please.

A Plain Dealer review of campaign contributions from the 2021-2022 cycle shows little has changed.

Brian Colleran operates a chain of 53 nursing homes around the state as founder of Foundations Health Solutions. He and his wife jointly contributed more than $360,000 to Republican candidates and state committees during the cycle. Colleran is currently on the tail end of a corporate integrity agreement with the federal government after he and his business partner agreed to settle with the U.S. Department of Justice and pay $19.5 million over alleged anti-kickback law violations. The settlement was not a finding of guilt.

In a statement through their attorney, the Collerans said they support children’s education, wildlife, land conservation, music, and arts, as well as health care initiatives focused on seniors and people with disabilities. They said they’re “blessed” to be able to support causes and individuals who share these values.

Ronald Wilheim and his family contributed nearly $340,000 to Republican candidates and committees. He’s the president of the long term care division of Communicare Health Services, a multistate operation. In a statement, Wilheim said he supports candidates who fight for employment, reducing inflation, and “pursue constructive initiatives to resolve our industry’s caregiver labor crisis.”

Wilheim sits on the OHCA board alongside other big contributors like Gerald Schroer, who runs the parent company of several nursing homes and vendors ($76,000), or Linda Black-Kurek, who oversees a chain of three facilities ($42,000).

Each of Ohio’s three nursing home trade associations has its own PAC. The Academy outspent the bunch this cycle ($215,000), followed by the OHCA ($141,000) and LeadingAge ($26,000), which represents nonprofit facilities.

OHCA also operates a “social welfare” nonprofit, which can raise and spend nearly unlimited sums of money in races. Over the past five years, it has spent $2.9 million, usually on advertising and grants to other political nonprofits, tax records show. That includes $515,000 over four years to another nonprofit now at the center of the U.S. Department of Justice’s criminal racketeering investigation into former House Speaker Larry Householder.

‘You get what you incentivize’

Among all candidates who ran for office in Ohio, no one received more money from the nursing home industry this cycle than Athens County GOP Rep. Jay Edwards. He was trailed by candidates with more of a statewide profile including GOP Gov. Mike DeWine and Senate President Matt Huffman, a Lima Republican.

During the cycle, Edwards’ campaign received about $55,000 from the Collerans, and $27,000 from their business partner. That’s not to mention $82,000 from a handful of other operators.

In an interview, he said the operators who aligned with him are likeminded in that they want to see serious quality of care incentives. He said rather than focus on a dollar amount or the mechanism of how funding goes out, he’s adamant that he wants quality incentives that force nursing homes to make improvements.

“We have a, in my opinion, a duty, to make sure that the money from Medicaid is being paid to nursing homes based off of quality, and not just being spread out evenly across everybody,” he said.

He too acknowledged the new quality incentive measures on the table might not fix every pitfall that arose during the pandemic. But he said they’re a step in the right direction, and away from a system that’s “gamed” by nursing homes to get more money than they deserve.

While he doesn’t want to do too much too fast, at risk of wiping facilities out of business, he said it should be a slow and steady process.

Source : Cleveland