For-Profit Nursing Homes May Be Overcharging Medicare

The care provided to residents by nursing homes driven by profit has often been questioned. Many observers wonder about their belief in committing as many resources as possible to ensuring that nursing home residents receive the care they deserve. There remains an inherent tension between spending money on quality care and cutting corners to increase the bottom line to owners and shareholders. We provide close oversight of these for-profit institutions when allegations arise of residents victimized by their inadequate care.

Along the same lines, new reports last week from the New York Times blog share another way in which these for-profit facilities may do anything in their power to maximize their payout. A Department of Health and Human Services report examined the rates at which different types of nursing homes classified the level of care each resident needed. The classification is important, because it determines the amount of funding provided to the facility by Medicare. The “higher” the classification, the more care needing to be provided to the resident and the more money to be sent.

Amazingly, in the years 2006 to 2008, the number of residents classified in the most severe group (demanding the most funding) jumped from 17% of all residents to 28%. Those changes cost Medicare a staggering $5 billion.

When examined further, researchers discovered that the leap had little to do with the changing dynamic of nursing home resident-their average health level remained unchanged. That means that facilities themselves were likely changing the classification to raise more money. In particular, for-profit nursing homes were much more likely to claim the highest classifications. 33% of for-profit resident are in that category, while only 18% of non-profit residents. Even within the group of profit-making facilities, the largest chains had the largest percentage of high classification residents.

Our Chicago nursing home lawyers at Levin & Perconti are not surprised by these findings. Our years of experience working with victims of poor nursing home care makes clear that the drive for money-maximization often leads to minimization of resident needs. When that occurs, lives are literally lost. Please help us stand up to these interests and seek the advice of a nursing home attorney when a loved one has suffered at one of these locations.

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