63% Of Indiana Nursing Homes Now Partnered With County Hospitals To Bilk Higher Medicaid Reimbursements

The Marion County Health & Hospital Corporation's use of a "wrinkle" in federal law that allows nursing homes that are "owned" by county hospitals to receive up to 50% higher reimbursement rates from Medicaid has apparently opened the flood gates in Indiana. The IBJ's J.K. Wall reports that 63% of the nursing homes in Indiana are now technically owned by county hospitals:

There are 329 nursing homes--or 63 percent of all facilities in Indiana--receiving extra federal money via partnerships with county-owned hospitals, according to the Indiana State Department of Health. The hospitals purchase the license of each nursing home from its operator, then typically hire the nursing home operator to manage the facilities, paying them a fee to do so.

This arrangement generates extra money because of a wrinkle in the payment of the federal/state Medicaid program. Medicaid rules allow governmental entities--which county-owned hospitals are--to pay their state Medicaid agencies extra fees that will trigger higher federal matching funds, up to a point that lets them receive their maximum payments.

According to Wall's story, nursing homes aligned with county-owned hospitals are receiving an extra $71.54 per day. Combined, nursing homes were able to pocket an additional $312.7 million in Medicaid reimbursements last year alone. Of course, the largest share of that money is going to the Health & Hospital Corporation, which owns more than 60 nursing homes across the state. HHC is using the extra money to pay for debt service on its new $750 million Eskenazi Hospital, which only provides charitable health care as a matter of last resort. It sues, threatens and finagles health care consumers every which way it can to squeeze money out of them, including the county for providing health care services to prison inmates, to the extent their health care costs aren't covered by government subsidized health insurance plans, private insurance or private pay on top of the taxes it collects from Marion County taxpayers to support its operations, which are currently running about $120 million a year. HHC collects well over $1 billion annually in revenues, the vast majority of which relates to its nursing home operations.

Notwithstanding the windfall that many nursing homes in Indiana are receiving from this "wrinkle" in federal law, the nursing home industry's lobbyists are pushing for passage of SB 173, which is sponsored by Sen. Pat Miller (R-Indianapolis) to place a moratorium on the construction of new nursing homes. SB 173 passed the Senate on a 33-14 vote. It appears that Mainstreet Property Group, which is owned by family members of State Rep. Eric Turner (R-Cicero), is pretty much alone in opposing SB 173.

It looks to me like someone in Congress should wake up and close this loophole that is distorting health care funding so badly by giving county-owned hospitals and their nursing home partners a huge advantage over other hospitals and nursing homes in providing health care with no discernible benefit to health care consumers other than bigger, newer and more expensive hospital buildings and higher paid corporate executives who run county hospitals like a business empire. I'm still wondering why not a sole in the Indianapolis media has attempted to learn how the hell a nursing home patient's bed caught on fire and badly burned her at one of HHC's nursing homes operated by American Senior Communities on the city's south side. Naturally, she was transferred to Eskenazi Hospital, which will earn tremendous fees from Medicaid for treating her burn injuries. I smell a cover up.