Iowa nursing homes benefit from Trump's regulatory rollbacks Fines are lessened after lobbyists call for changes in oversight

Clark Kauffman | The Des Moines Register

Show Caption Hide Caption Nursing homes seek relief from fines Industry officials have launched a lobbying effort to reduce "over-zealous" regulation, despite multiple violations at Iowa nursing homes.

Lobbyists for Iowa’s nursing home industry called federal regulators last month and thanked them for lowering fines imposed on facilities that deliver substandard patient care.

Iowa Health Care Association President Brent Willett told the regulators that "2016 cannot happen again," referring to the record $4.6 million in federal fines that Iowa homes paid two years ago under the Obama administration.

The June 7 phone call — arranged by U.S. Sen. Charles Grassley, and including staffers from the offices of Grassley and his fellow Iowa Republican, Sen. Joni Ernst — coincides with complaints from senior advocates who say the Trump administration is putting the nation’s 1.5 million nursing home residents at risk by rolling back regulations and reducing fines.

During the call, Willett and his colleagues “thanked” the officials at the federal Centers for Medicare and Medicaid Services for revising the assessment tool they use to calculate fines against care facilities, according to a Health Care Association memo.

That memo also states that a CMS manager noted that while Iowa was now “trending downward overall” in terms of fines, it was still was an “outlier,” regionally and nationally, for the violations being cited.

Willett asked the regulators to “continue to pursue a more collaborative — and less punitive — role” in regulating nursing homes, the memo states.

A Des Moines Register review of the penalties imposed against Iowa nursing homes shows that federal fines increased dramatically from 2012 through 2016, then plummeted immediately after Donald Trump took office as president in January 2017:

Between 2012 and 2016, federal fines imposed on Iowa homes grew from $113,305 to $4.6 million annually — an increase of almost 4,000 percent. The individual fines were larger, but there also were many more of them, increasing from 26 in 2012, to 120 in 2016.

By 2016, nursing homes in Iowa were among the worst in the nation with regard to serious, repeat-offense violations that caused actual harm or placed residents in immediate jeopardy. Only six other states — including the two most populous states, Texas and California — were cited for more violations of that kind.

In 2017, the first year of the Trump administration, federal fines against Iowa homes dropped by half, to $2.3 million. While the number of violations that triggered fines had increased slightly, the penalties, on average, were half what they were in 2016.

“None of that surprises me, unfortunately,” said Toby Edelman of the nonprofit Center for Medicare Advocacy. “The current administration has been marching in complete lockstep with the industry. And, really, the first thing they did was go after the enforcement system.”

"CMS needs to focus a lot less on what the nursing home industry wants and focus a lot more on what consumers and taxpayers want,” said John Hale, a consultant and Iowa advocate for the elderly. “Right now, it’s a horribly lopsided conversation, resulting in lopsided results that go in the industry’s favor."

A spokesperson for Grassley said the senator facilitated the call for the Iowa Health Care Association lobbyists “to help stakeholders connect to CMS directly and get their questions answered,” just as he has done with constituents on other issues.

Willett, the IHCA president, said his organization and CMS “share a common goal, which is to make sure Iowa’s frail and elderly citizens receive professional and compassionate care. Open and collaborative discussions like the one we had with CMS on June 7 help ensure Iowa’s skilled nursing care facilities continue to place among the country’s highest-quality-rated providers.”

The Trump administration characterizes its efforts on oversight as long-overdue “reform” that will lighten the regulatory burden on homes, lessen the penalties they face for quality-of-care violations and lead to improved care for the 1.5 million Americans living in nursing homes.

But earlier this year, 12 U.S. senators — all Democrats or Independents — formally complained to CMS that the agency appeared “intent on rolling back or delaying enforcement of regulations that are meant to keep nursing homes safe for the patients they serve.”

Seventeen state attorneys general, including Tom Miller of Iowa, have also objected to administration’s new approach to regulation, arguing the changes “threaten the mental and physical security of some of the most vulnerable residents of our states” and represent “an abuse of federal law.”

The American Health Care Association says the concerns expressed by the attorneys general are based in part on “old data” and they point to the decreased penalties in 2018 as evidence of improved care rather than evidence of decreased oversight.

However, in the AHCA’s 2017 annual report to members, the organization boasted that it is a “powerful political voice” and pointed out that it has “worked closely with CMS to gain regulatory relief” and succeeded in having CMS curtail its use of large “daily fines” it once imposed for each day a nursing home failed to meet minimum standards of care.

“This is what happens when promised deregulation rules the day,” said Dean Lerner, the former director of the state agency that inspects Iowa nursing homes. “Iowans are put in harm's way. Health, safety, and welfare of Iowa's vulnerable seniors take a backseat to industry profits and interests.”

CMS to industry: 'We heard you'

In some of its communications, CMS now refers to the nursing homes that it oversees as “customers” or “partners,” and says it will be “exploring improving care through other remedies” than fines and penalties.

In a recent newsletter aimed at industry officials, CMS detailed the specific complaints of industry leaders, adding, “We heard you,” and, “We have been working to reduce burdensome regulations.”

Under the Obama administration, CMS made regular use of the daily fines, which had no cap on the total amount that could be imposed.

Now, under the Trump administration, the agency more often issues one-time, "per-instance fines," which are capped at $20,965, for the underlying offense.

That change has a profound impact in Iowa.

In 2016, CMS levied 10 times as many daily fines as the less costly per-instance penalties. In 2017, the situation was reversed, and the per-instance penalties represented 68 percent of all federal fines imposed.

CMS is also allowing homes to argue financial hardship in seeking a reduction in the fines they’re ordered to pay.

In the past, the agency would only consider lowering a fine if the owners were so strapped for cash they could demonstrate a fine would force them out of business.

CMS is also discouraging its regional offices from fining nursing homes for serious, one-time errors — as opposed to ongoing, systemic issues or deliberate attempts to injure people — even if they contribute to a death.

At the industry’s request, CMS has also put a hold on fines for violations of eight new safety regulations, and relaxed a proposed Obama-era rule that would have required every nursing home to have a grievance officer that could handle complaints from residents and family members.

Later this month, CMS is expected to announce additional “reforms” aimed at reducing the regulatory burden on nursing homes.

All of these regulatory changes coincide with new federal funding formulas and tax breaks the Trump administration says will save nursing homes $2 billion over the next decade and generate an additional $850 million in revenue for them this year alone.

"The nursing home message to state and federal government officials is a simple one,“ Hale said. “It is, ‘Give us more taxpayer money and leave us alone.’ That’s exactly what’s happening. They get more tax dollars flowing to them while the accountability for good use of these dollars becomes less and less.”

CMS spokeswoman Julie Brookhart said the centers' recent initiatives are intended “to provide equitable and consistent application" of enforcement remedies across the nation. She said daily fines are still imposed in certain cases involving repeat offenses, resident abuse or residents being placed in immediate jeopardy.

Because there are many variables in the way fines are calculated, it’s impossible to say what the fines imposed today in Iowa would have been under the Obama administration.

But it’s clear that two years ago federal fines were typically much larger than those proposed by state regulators. That’s not always the case now.

For example, in January 2017, Elm Crest Retirement Community in Harlan was cited for injuring and almost killing a resident who was mistakenly given five drugs intended for another resident.

The state proposed a $7,000 fine but let federal officials take over the case. The home ultimately paid a federal fine of $1,757.

One month later, Pinnacle Specialty Care in Cedar Falls was cited by the state when a resident died two weeks after a fall at the home. The state proposed an $8,000 fine, but federal officials stepped in and the home paid a federal penalty of only $3,316.

In April 2017, the QHC South facility Humboldt was cited by inspectors for violations related to resident abuse and inadequate nursing services when a resident sustained multiple fractures at the home and received no treatment for several hours, then died.

The state proposed a $28,000 fine, but the home was ultimately penalized $10,863 by federal officials.

In each of those cases, some of the difference is attributable to the homes’ deciding to forego an appeal, which triggered an automatic 35 discount on the federal fine.

But that same discount was available during the Obama years when federal fines typically dwarfed those proposed by the state.