Problematic KY Nursing Homes Profited From Pandemic Relief

During the 2020 pandemic, many nursing homes and long-term care facilities received legal protection from liability as well as financial aid, in the interest of keeping their doors open during a public health crisis. In Kentucky, some nursing homes were shown to have profited even as their level of care decreased.

In Louisville, a WHAS11 FOCUS investigation found that almost 30 skilled nursing facilities had been fined. Of those homes investigated, 23 profited more from incentives gained through COVID-19 subsidies than they were fined by the government for infractions.

One source of this conflict in funding is that two different government entities were doing the fining and incentivizing. The Centers for Medicare and Medicaid Services (CMS) was fining facilities as part of its normal duties, while the U.S. Department of Health and Human Services (HHS) was disbursing money, according to the Provider Relief Fund COVID-19 Nursing Home Quality Incentive Program.

The HHS-administered Provider Relief Fund COVID-19 Nursing Home Quality Incentive Program is part of the CARES act that passed in 2020, which allocated $2 billion to long term care homes. In order to qualify for aid under the Provider Relief Fund COVID-19 Nursing Home Quality Incentive Program, the nursing home must “reduce both COVID-19 infection rates relative to their county and mortality rates against a national benchmark.”

Since this program was focused solely on controlling COVID-19 in nursing homes, it applied to homes that had clean records and loans that had received numerous fines. This resulted in homes that received high amounts of fines actually profiting because they reaped more in COVID prevention incentives.

One of the facilities investigated by the WHAS11 investigation was Regis Woods, which was fined $202,153.25 by CMS but received $568,440.00 from HHS in COVID incentives for a net gain of $366,286.75. While Regis Woods is the most extreme case, other nursing homes are documented as having tens- and hundreds of thousands of dollars in incentivized profit that far outweighs their fines for poor behavior and noncompliance.

Betsy Johnson, a representative of the Kentucky Association of Health Care Facilities and the Kentucky Center for Assisted Living, defended the facilities, stating, “You have to have money to keep the lights on, you have to have money to pay your workforce, you have to have money to acquire PPE, that’s what the provider relief fund was intended to do.”

Brian Jasper, an attorney for the Thomas Law Office who specializes in patient litigation, disagreed, stating, “It’s a net gain for the facility after they appeared to be failing to meet minimum regulations.”

When WHAS11 showed Jasper the results of their investigation, he commented on the facilities, stating, “Basically, they’re being paid to fail.”

With the pandemic slowing, the subsidies have similarly begun to fade and many of these facilities will be left to reckon with the decision to either change their practices, or be disciplined and potentially closed by CMS.

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