Disability Action Center NW, Inc.

Salaries, Profits and Nursing Homes - 7/05

The Disability Odyssey Continutes
By Steve Gold
Link to Article

The New York Times has a front page story entitled "New York Medicaid Fraud May Reach into the Billions," 7/18/05. While we thought we already heard all the MA abuse stories possible, at the end of this article was some information that Disability Advocates should be seeking in your States. Let me quote the article:

"Among the biggest beneficiaries of the Medicaid program have been executives of the state's nursing homes and clinics, many of whom earn substantial salaries and profits from the program."

"Substantial salaries"?? "Profits" from nursing homes?? "Biggest beneficiaries" - we thought those were the persons with disabilities. Is the MA nursing home world upside down?

What could the reporters mean. The NY Times could not be referring to States where the Governors are threatening to reduce the MA benefits for disabled persons. Not your State.

The article continued: "According to records obtained from the Health Department under the Freedom of Information Law, 70 executives of nursing homes and clinics personally made more than $500,000 in 2002.... Twenty-five executives made more than $1 million."

Quick, get the calculator - that's more than $60 million salary for only 105 executive directors. Disability Advocates - we're in the wrong business. Wow, have we been hoodwinked. We thought these were nursing "homes" - not businesses.

The NY Times continued: "For the nursing home executives, that money was earned in salaries and profits, most of which came directly from the daily fee that Medicaid pays for caring for low-income patients, usually in the range of $200. Salaries are earned by employees of the homes, and profit is earned by owners, although owners are often executive directors or chief executives of the homes, allowing them to benefit in both ways."

Is there a disconnect "low-income" and "benefit"? Could these "salaries and profits" explain why Governors have fought so hard to let the "Money Follow the Person"? If the disabled person in the nursing home controlled the MA funds and could use it to live integrated in the community, egads, "salaries and profits" would not go the executive directors. MA would benefit the disabled person.

If you want to hear real chutzpah, the article states that "Trade groups representing nursing homes counter that most homes in the state are actually in financial distress because Medicaid does not pay enough." Duh, take less salary and profit.

WHAT DISABILITY ADVOCATES SHOULD DO:

1. Figure out how you can get this same information in your State. Does your Dept of Health collect it? Is there a Freedom of Information Act handle? Can a friendly State legislature demand it? Just get it.

2. Use the data to demand "Money Follows the Person." Start a campaign to stop the type of outrageous practices the NY Times article describes. Tie these outrageous profits and salaries to both "Money Follows the Person" and "No MA Cutbacks."

3. Check out if your State has a record of how much the nursing home "Trade group" in your State contributed to the last political election and to whom did it contribute.

Steve Gold, The Disability Odyssey continues

Back issues of other Information Bulletins are available online at http://www.stevegoldada.com with a searchable Archive at this site divided into different subjects. To contact Steve Gold directly, write to stevegoldada@cs.com.