Trends in Long-Term Care - U.S. Senate Special Committee on Aging

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(5) Deal<strong>in</strong>gs by nurs<strong>in</strong>g homes with related real estate, construction and
f<strong>in</strong>anc<strong>in</strong>g companies.
The <strong>in</strong>vestigation should also <strong>in</strong>clude a full scale study and audit of the cha<strong>in</strong>
nurs<strong>in</strong>g home operations, particularly those that have been created s<strong>in</strong>ce the
advent of the Medicaid program. Every effort should be made to uncover how
nurs<strong>in</strong>g homes <strong>in</strong> States with low, flat-rate Medicaid reimbursement manage to
make a profit. 1)o they reduce the patient care budget, or do they make money
through deal<strong>in</strong>gs with affiliated real estate and construction companies or suppliers
as is often alleged?
The f<strong>in</strong>ancial side of the nurs<strong>in</strong>g home <strong>in</strong>dustry has been ignored by the State
and Federal Medicaid programs. We are sure that a study such as we have
suggested will not only result <strong>in</strong> a sav<strong>in</strong>g of Medicaid money that is now be<strong>in</strong>g
diverted <strong>in</strong>to illicit profits, but will also enable HEW to devise mechanisms to
assure better patient care.
The National Council of Senior Citizens stands ready to help you with such
a study. S<strong>in</strong>cerely,
NELSON H. CRUIKSHANIC, President.
Senator Moss. One other prelim<strong>in</strong>ary matter before we get on with
the hear<strong>in</strong>g as such, I am pleased to have Assemblyman Andrew Ste<strong>in</strong>
sitt<strong>in</strong>g this morn<strong>in</strong>g with the panel.
This is an official action of the <strong>Senate</strong> committee, but we do often
<strong>in</strong>vite people who are <strong>in</strong>terested <strong>in</strong> the work that we are do<strong>in</strong>g, to
sit here and listen to the witnesses, and Mr. Ste<strong>in</strong> has done a great
job <strong>in</strong> the State of New York, expos<strong>in</strong>g many of these deficiencies
that we are go<strong>in</strong>g to be talk<strong>in</strong>g about, and I am pleased to have him
with us this morn<strong>in</strong>g.
We are pleased to have you, Mr. Ste<strong>in</strong>.
In preparation for this hear<strong>in</strong>g, because we have had such a great
difficulty <strong>in</strong> ever gett<strong>in</strong>g the records of nurs<strong>in</strong>g homes, we issued some
45 subpenas to nurs<strong>in</strong>g homes <strong>in</strong> New York for their records, the
subpenas have been served on various ones of the nurs<strong>in</strong>g homes, and
response has been made to the subpenas.
Mr. Val Halamandaris, who is Counsel to the <strong>Special</strong> <strong>Committee</strong>
on Ag<strong>in</strong>g, and who works with this subcommittee, will now call the
roll, and <strong>in</strong>dicate what records have been submitted and are here.
We have here representatives of the General Account<strong>in</strong>g Office.
I am advised, before we call the roll on the subpenas, that Assemblyman
Ste<strong>in</strong> does have a brief statement he would like to make, and I
w-ill recognize him.
STATEMENT OF ASSEMBLYMAN ANDREW STEIN, CHAIRMAN, TEM-
PORARY COMMISSION ON LIVING COSTS AND THE ECONOMY
Assemblyman STEIN. On behalf of the Temporary State Commission
on Liv<strong>in</strong>g Costs and the Economy, I would like to thank the
U.S. <strong>Senate</strong> Subcommittee on <strong>Long</strong>-<strong>Term</strong> <strong>Care</strong> of the <strong>Special</strong> <strong>Committee</strong>
on Ag<strong>in</strong>g and Senator Moss for hold<strong>in</strong>g this hear<strong>in</strong>g to <strong>in</strong>vestigate
the nurs<strong>in</strong>g home <strong>in</strong>dustry <strong>in</strong> New York.
The magnitude of the nurs<strong>in</strong>g home <strong>in</strong>dustry <strong>in</strong> New York is stagger<strong>in</strong>g.
Last year medicaid reimbursements ran over $1/2 billion to
proprietary nurs<strong>in</strong>g homes.
Over 92 percent of the 70,000 elderly citizens of this State now
resid<strong>in</strong>g <strong>in</strong> nurs<strong>in</strong>g homes are supported by medicaid, a comb<strong>in</strong>ation
of Federal, State, and local funds.