Posts Tagged 'Elderly'

Social Security Agency To Investigate If California Is Illegally Denying Social Security Disability and SSI Claims

California Disability Action Community Network,  November 23, 2009

Social Security Agency To Investigate If California Is
Illegally Denying Social Security Disability and SSI Claims

Social Security Commissioner Says Furloughs of Federally Funded State Employees In Dept. of Social Services Who Help In Determining Eligibility May Be Cause of Possible Violations of Federal Social Security Laws – Investigation Comes After Charges Made by San Diego Congressman Who Charged That  Denials of Claims Are Coming At “Expense of Those In Greatest Need”

SACRAMENTO, CALIF (CDCAN) [Updated 11/23/09  07:20 AM  (Pacific Time)  -  The US Social Security Administration will investigate allegations by Rep. Robert Filner (Democrat - San Diego) made before the US House Way and Means Subcommittee on Social Security on November 19th that California is improperly denying social security and SSI (supplemental security income) program claims as a means to get around delays caused by mandatory furloughs of state workers in the Disability Determination Service division within the Department of Social Services, who play a critical role in determining eligibility for those two programs.  The investigation will also look at similar policies and problems in Hawaii which has instituted similar mandatory furloughs of its state employees.

There was no official statement by the Schwarzenegger Administration reacting to the Social Security Administration's investigation.

As a budget cutting measure, earlier this year Governor Arnold Schwarzenegger ordered mandatory furloughs of all state departments and agencies - including the Department of Social Services, which are closed on the first, second, and third Friday of each month until June 30, 2010.  The Department of Social Services' Community Care Licensing Division and the Disability Determination Service Division offices will remain open and operate on "self-directed furloughs".

Commissioner Michael J. Astrue who heads the federal agency, said on Friday (November 20) that in a memo to Patrick P. O'Carroll, Inspector General of the Social Security Administration, ordered the investigation writing that:

...Governor Schwarzenegger has insisted on furloughing California Disability Determination Service...employees, despite the fact that we fully fund both their salaries and overhead.  According to Congressman Robert Filner, the State is attempting to find ways to improperly circumvent the effects of the furlough at the expense of some of the State residents who are in the greatest need.

The action by the Social Security Administration, which has no immediate impact on the state, does add yet more uncertainty about various state budget reductions, with California facing yet another huge budget shortfall - now estimated to be $21 billion by the end of the 2009-2010 State budget year (June 30, 2010).  Advocates and policymakers alike expect more major spending cuts to be proposed in the coming months to close the growing shortfall.

Congressman Filner Makes Charges of Improper Denial of Claims

Congressman Filner testified last Thursday that the California's Disability Determination Service (known as "DDS" - same initials as the "Department of Developmental Services" which is a completely different state agency)  is denying the claims of disability applicants who fail to return a 25 page report within 20 days - a practice which has been adopted since the mandatory state furloughs were implemented earlier this year, reporting the following:

  • One California Disability Determination Service field office, Filner claimed, had closed 30% of its cases due to an individual's failure to return the completed application form within 20 days.
  • In addition, Filner said he believed that California Disability Determination Services (under the California Department of Social Services) may be manipulating its service numbers by assigning claims to fictional examiners or supervisors, which Filner says would allow the state to hide the fact that these cases are not actually being reviewed.

Commissioner Is Bush Appointee - Reports Directly to President Obama

Commissioner Astrue, appointed by President Bush on September 14, 2006 and confirmed by the US Senate on February 2, 2007, was sworn into office on February 12, 2007 for a 6 year term that expires January 19, 2013.

The commissioner, who oversees the independent federal agency with over 60,000 federal employees and 1,500 offices across the nation,  reports directly to President Obama.  The headquarters is in Baltimore, Maryland.

Impact on People With Disabilities, the Blind & Seniors

The issue has actual and potential impact on thousands of children and adults with disabilities, mental health needs and seniors, among others, who are applying for federal social security disability benefits or federally funded SSI grants.  In California the SSI recipients also include an additional state funded "SSP"  (Supplemental Security Payments) grants.

Any delays or outright denial of claims - especially those dealing with SSI/SSP - could have a ripple effect also on a person's immediate accessible and affordable housing, transportation and medical and other support needs.

The Department of Social Services estimated in May the SSI/SSP caseload by June 30, 2010, will total 1,290,473 persons:

  • 376,163 who are seniors or 30% of the projected caseload
  • 20,225 persons who are blind (or 2% of the projected caseload)
  • 894,085 who are children and adults with disabilities (or 68% of the projected caseload)

Background of Disability Determination Service

  • The federal Disability Insurance program, established under Title II of the federal Social Security Act, provides benefits to wage earners and their families in the event the wage earner becomes disabled.
  • The Supplemental Security Income program, established under Title XVI of the federal Social Security Act, provides benefits to financially needy individuals who are aged, blind, or disabled.
  • The federal Social Security Administration (SSA) is responsible for implementing policies of handling and determining eligibility of disability claims under the Disability Insurance and Supplemental Security Income programs.
  • Persons apply for either social security disability or SSI at any Social Security office. If the person applying meets the non-medical criteria, their application would then be sent to the state's Disability Determination Service, who will then obtain the applicant's medical and other related records to determine severity of the disability or impairments and the impact on the ability to engage in work.
  • In each of the 50 states (plus the District of Columbia and Puerto Rico), eligibility - or determinations under both Disability Insurance and Supplemental Security Income are performed by its own "Disability Determination Service" (known as "DDS" - same initials used for the Department of Developmental Services, which is a different state agency entirely, though the same person could have gone through Disability Determination Service for SSI eligibility - and then to the Department of Developmental Services for supports and services) in each state. In California, the Disability Determination Service is a division under the Department of Social Services. It has 11 branch field offices, including 3 in Los Angeles County.
  • The federal Social Security Administration reimburses state Disability Determination Services for 100% of allowable expenditures up to its approved funding authorization.

Social Security Administration Previously Raised Concerns of State Furlough Impact on Social Security Disability and SSI Claims

In a related action by the Social Security Administration dealing with the impact of California's furloughs, on October 16th, the US Department of Justice, on behalf of the Social Security Administration,  filed a "Statement of Interest" in the state lawsuit "Union of American Physicians and Dentists v. Arnold Schwarzenegger, Governor of California" that seeks to stop the mandatory state furlough program.    The state lawsuit, filed in the Alameda County Superior Court, is still pending further action.  It is one of several lawsuits filed by different unions and agencies regarding the mandatory state furloughs.

The Union of American Physicians and Dentists includes state employees of the California Disability Determination Services Division under the Department of Social Services, who evaluate the medical or health part of a person's Social Security Disability or SSI (Supplemental Security Income) claims.  The federal government fully pays for the salaries and overhead costs for these state employees in all 50 states.

The "Statement of Interest" which indicates in this instance support of this specific lawsuit, notes that California's furloughs of these specific state employees are inconsistent with the state's obligations and responsibilities under the federal Social Security Act which requires a state, in carrying out disability determination functions, "to the best of its ability, facilitate the processing of disability claims by avoiding personnel freezes, restrictions against overtime work, or curtailment of facilities or activities."

Commissioner Astrue said in October:

...for many months we have been trying to convince California officials that furloughing [Disability Determination Service Division state] employees does not save the state a single penny, and actually costs the state money.  It also unnecessarily harms their citizens with disabilities and their civil servants. Unfortunately, our arguments have fallen on deaf ears.  We hope our Statement of Interest will awaken state officials to the irreparable damage their furlough policy is causing.

Asture said in October that California’s furlough of Disability Determination Service employees under the Department of Social Services costs the state $849,000 per furlough day in administrative funding and that  ”…each furlough day results in a delay costing California’s disabled citizens over $420,000 in much-needed Social Security benefits”.

The State, represented by the California Department of Justice, is denying those claims in the various lawsuits.


The following is the memo to Social Security Administration Inspector General Patrick P. O’Carroll from Commissioner Astrue, dated November 20th:

At yesterday’s [November 19th] hearing before the House Ways and Means Subcommittee on Social Security, I testified about some disturbing practices the State of California has instituted that aggravate, rather than help, in response to its budgetary situation.  As you know, Gov. Schwarzenegger has insisted on furloughing California Disability Determination Service (DDS) employees, despite the fact that we fully fund both their salaries and overhead.  According to Congressman Robert Filner, the State is attempting to find ways to improperly circumvent the effects of the furlough at the expense of some of the State residents who are in the greatest need.

Congressman Filner indicated that since the furloughs began, the California DDS [CDCAN Note: same initials as Department of Developmental Services which is a different state agency] has begun denying the claims of those disability applicants who fail to return a 25-page report within 20 days.  This practice, if true, places applicants in an untenable position because the substantial amount of information required must often be gathered from third parties.  If an applicant fails to return complete information within the time set by the State, the DDS deems the applicant to have failed to cooperate and closes the file, thereby depriving that applicant of fair and full consideration.

I am also greatly concerned by Congressman Filner’s report that the California DDS may be manipulating its service numbers by “staging” claims, assigning them to fictional examiners or supervisors, rather than to actual examiners.  According to Congressman Filner, this practice would allow the DDS to claim that the cases have been assigned, rather than indicate that they are still in queue, thus minimizing the effects of the furlough.

If true, these practices are, of course, very disturbing.  Therefore, I am asking you to undertake a full review of the practices of the California DDS to determine the scope and breadth of any inappropriate practices.

I am also concerned about the State of Hawaii, which is furloughing its DDS employees for as many days as California, and which has made statements about new business efficiencies that closely track statements made by California officials.  Accordingly, I ask that you also review that agency to ensure they are fully adhering to all SSA rules and policies.

Thank you for your assistance.

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Note from Marty Omoto:

I have decided to return to the work of advocacy for the lives that matter. Thanks to all the hundreds of email messages, phone messages from so many people across the state who reminded me what I often have reminded others of: that we are a part of all that we have met – and that we no choice but to continue and to survive, and to fight for what is right and to always remember the lives that mattered – and the lives that still – and will always matter. That is what we fight for. And that is what we cannot let the State or anyone forget.

And we will get through this.

Gandhi once wrote that we must be the change we want to see in the world. And so we will be that change together. Marty Omoto

Schwarzenegger and the budget crisis: it’s easy to target those least able to fight

Los Angeles Times, August 1, 2009

Schwarzenegger and the budget crisis: easy to be hard

Funny, isn’t it, that when the governor scours the state budget for waste, fraud and abuse, he only seems to find it in programs for the old, the young, the poor and others unable to raise campaign funds or muster political opposition.

Like those seniors and disabled people in the state’s In-Home Supportive Services program. IHSS allows them to stay out of nursing homes or other facilities far more expensive for them, their families and ultimately the state and its taxpayers. Clients don’t get direct state payments, just basic care such as meals and changes of clothes and linens. But beware; there could be hundreds of seniors scurrying from county to county under assumed names, trying to rack up as many sponge baths as possible. So California will now crack down by fingerprinting them.

Or those CalWorks recipients, who probably just signed up for welfare to get job training. Well, there are no jobs out there right now, so they must be abusing the system. We showed them — by cutting funding for job training. And then there are the people raking in all that subsidized Medi-Cal and Healthy Families care. They just want to get the state to pay for cheap preventive care so it doesn’t have to pay for expensive emergency care. Nice try. We’ll cull recipients by centralizing the eligibility process, because everyone knows it’s better to run government from Sacramento rather than closer to home.

California had to cut. But there’s a double irony at work. First, the point of the social safety net is to be there when it’s most needed — to ensure that during times of widespread unemployment and financial distress, the people on the edge can avoid falling into an abyss; that’s vital to them, of course, but good for the rest of us too, because it costs more to retrieve the fallen than to keep them out of the abyss in the first place. And second, after they are cut, human service programs get branded as wasteful and fraudulent and get cut again, because they don’t have a California Teachers Assn. or a California Chamber of Commerce standing up for them.

Certainly there are instances of waste and fraud in government. Fingerprinting IHSS providers, who are paid with taxpayer funds, makes some sense. But fingerprinting the home-bound clients? If that’s not an example of new wasteful government spending, it’s hard to know what is.

Meanwhile, instead of cracking down on tax fraud, California is furloughing its tax workers, who will have less time and fewer resources to collect taxes owed. It’s retaining redundant Cabinet offices, which oversee fully staffed state agencies. And in the name of erasing waste, fraud and abuse, it’s leading a devastating march through the path of least political resistance.

California Democrats toss poor, elderly, disabled, and working class overboard

“This is absolutely parallel to the fascism of Europe during the 1930s, in it’s broad attack on the elderly, disabled and poor, who are being scapegoated just as the Jews of Europe were in the 30s. They are turning citizens into aliens, and are trying to turn the elderly and disabled into criminals. I can bear witness to the damage being done to people in my generation, by the horrific effects of the budget cuts taking place,” said Walden, “and I further believe that we have become living targets of a fascist state. As witness to recent events, I am convinced that we are on the road to fascism.”

Indybay Media, July 25, 2009

Democrats sell out California’s poor, elderly, and disabled in budget deal

by Lynda Carson of Tenants Rule

California’s phony bleeding heart liberal democrats have just helped to pass a republican budget deal that shreds California’s safety net, by cutting $15.5 billion from the states service sector to partially close a $26.3 billion funding shortfall in state revenues.

Among other things, the democrats supported a $1.3 billion cut to MediCal, a $2.8 billion cut to the state wide university school system, and a $6 billion cut to California’s K-12 schools. The democratic leadership also supported the republicans push to slash the children’s health insurance program known as Healthy Families, In-Home Supportive Services and the CalWORKs program by cutting $878 million or more in coming months.

Rather than raising taxes on the rich and the major corporations that fail to pay their fair share of the tax burden in California, the democrats chose to side with the republicans and two bit actor ‘Schwarzenegger’ turned governor, in stealing precious resources meant to assist students, children, the sick, disabled, elderly, poor and the working middle class.

Meanwhile, Congresswoman Barbara Lee and other phony liberals continue to remain silent about the budget cutting process taking place in Sacramento, while the true extent of the attacks on the poor, elderly and disabled reaches new heights of deception and depravity.

During recent weeks, numerous calls made to Congresswoman Lee’s office inquiring as to why the powerful congresswoman remains silent about the attack on California’s safety net, have resulted in nothing more than a “BIG NO COMMENT,” coming from her staffers in Washington, including her local spokesperson Ricky Graham, in Oakland. “California’s budget crisis is a state issue, not a federal issue, and therefore Congresswoman Lee has no comment,” said Graham.

Considering that Congresswoman Lee represents millions of people in the great state of California, Ricky Graham’s statement was totally lacking in credibility and humanity.

As California’s democratic leadership including Assembly Speaker Karen Bass and Pro Tem Darrel Steinberg along with a total of 18 democrat sell-outs who supported the republican’s attack on the safety net try to conceal how much damage they have wrought upon the general public, hundreds of thousands of Californians will be hit hard in future months by the budget deal that protects the interests of the mighty rich, as it crushes the lives and interests of the working class poor.

Making matters worse for the elderly, disabled and poor, the democratic leadership granted extreme new powers to the republican minority by agreeing to proposals that do major damage to COLA’s (cost of living increases) for those in CalWORK’s, SSP and other areas of the states safety net, by requiring that any new COLAs for the people in those programs, must be approved by a two-thirds vote in future budget proposals.

At a small July 22, rally in front of Oakland City Hall, Eleanor Walden and her daughter Nasira, publicly spoke out against the republican budget cutting proposals along with Zachary Norris of ‘Books Not Bars’, and Kevin D. Shields the ‘DSRP Coordinator’ for the Disabled Students Program at the University of California, in Berkeley.

“The thought of the democrats siding with the republicans in the fascist proposals being passed to make the elderly and disabled get finger printed because of their participation in the ‘In-Home Supportive Services Program’, is enough to make my blood boil,” said Eleanor Walden, a Berkeley scholar of 20th century American history and folklore.

“This is absolutely parallel to the fascism of Europe during the 1930s, in it’s broad attack on the elderly, disabled and poor, who are being scapegoated just as the Jews of Europe were in the 30s. They are turning citizens into aliens, and are trying to turn the elderly and disabled into criminals. I can bear witness to the damage being done to people in my generation, by the horrific effects of the budget cuts taking place,” said Walden, “and I further believe that we have become living targets of a fascist state. As witness to recent events, I am convinced that we are on the road to fascism.”

Kevin Shields the DSRP Coordinator for disabled students said, “By cutting the social services desperately needed by the disabled and elderly, you create a whole new class of citizens who become angry, frustrated and disillusioned about the system that was meant to assist them in their time of need.”

Lydia Gans of Food Not Bombs said, “We already are seeing a huge increase in the homeless and hungry, due to the effects of a bad economy during our feeding times at People’s Park. The non profits who usually help out are losing funding and donations, and this latest round of budget cutting proposals will increase the level of homelessness and hunger all across the state. What should be happening, is that everyone affected by the budget cuts should be in the streets of Sacramento and cities across the state to protest against the inhumanity and catastrophic effects that are taking place in everyday peoples lives.”

As being proposed by state law makers, theres an additional $8 million in funding to be slashed from the budget for state parks, on top of the $226 million in cuts to IHSS, plus $528 million from CalWORKS, including $124 million in cuts from the Healthy Families program that will negatively affect 930,000 low-income children.

SSI/SSP recipients have already taken a huge 6.4% cut from the state assistance program since February 2009, including the suspension of their cost of living increases that were promised to be payed back, after being grabbed by the governor. It will be nearly impossible to restore the cost of living increases now that the democrats gave new sweeping powers to the republicans who are demanding a two-thirds majority vote to allow a cost of living adjustment to occur in future months and years.

As the democrats try to conceal and deceive the public about the true extent of damage they have done to California’s safety net by siding with the republicans in the vicious attack on children, the disabled, elderly and working class poor, additional budget cuts are expected as the governor prepares to use the line item veto during the next few days to slash another $1.1 billion dollars from the budget, in an attempt to balance the budget on the backs of the poor.

A press conference and rally for the ‘People’s Budget Fix’, calling for criminal justice reforms that will increase public safety, protect the social safety net and save the state billions, will take place on July 30, between 11am – 12pm, at the Elihu M. Harris State Building, 1515 Clay St, Oakland, near the 12th St, BART Station.

Contact Jennifer Kim; Jennifer [at] or (510) 285-8234 for more details about the July 30 rally.

Elderly Medicare, Medicaid patients not receiving quality care

UCLA News, Oct. 16, 2007
Elderly Medicare, Medicaid patients not receiving quality care

Study of Medicare and Medicaid billing data represents advance in health care quality measurement
Enrique Rivero

If the care received by vulnerable older people concurrently enrolled in Medicare and Medicaid was evaluated on a grading scale, it would squeak by with a barely passing mark, a new UCLA study has found.

Using quality-of-care measurements developed by the Assessing Care of Vulnerable Elders (ACOVE) project, researchers found that vulnerable elderly patients received only 65 percent of the tests and other diagnostic evaluations and treatments recommended for a variety of illnesses and conditions, including diabetes and heart disease. The study findings appear in the October issue of the peer-reviewed journal Medical Care.

“Thirty-five percent of the medical care interventions that they should have received were not provided, indicating significant room for improvement,” said lead author Dr. David S. Zingmond, assistant professor of general internal medicine and health services research at the David Geffen School of Medicine at UCLA. “We’d much rather have everything higher — say, at least 90 percent.”

The researchers based their work on linked Medicare and Medicaid claims data — something that is not routinely done.

“Going forward, measures like these will be increasingly important because more detailed health care information, such as electronic health records, are difficult to obtain,” Zingmond said.

The researchers gathered data from 100,258 community-dwelling geriatric patients in 19 California counties between 1999 and 2000. All the patients were enrolled in both Medicare and Medicaid. The mean age of participants was 81, 70 percent were women, 45 percent were non-Hispanic whites, 26 percent were Asian, 9 percent were African American, 13 percent were Hispanic and 7 percent were of unknown race or ethnicity. “Vulnerable elders” are defined as geriatric patients who are at increased risk of death or functional decline.

Using linked Medicare and Medicaid data from the California Center for Long Term Care Integration — a collaborative effort between the UCLA Division of Geriatrics and the University of Southern California School of Gerontology — researchers examined quality for 43 specific types of care (for example, receiving a new medication or having a diagnostic test) for common conditions such as depression, diabetes, hypertension and heart failure.

They found that in too many instances, elderly patients were not given the full range of treatments and services for their conditions. For example, only 42 percent of patients with diabetes were tested to gauge their blood sugar control or received an eye examination during the one-year study period. Likewise, many patients who were newly diagnosed with heart failure did not receive recommended diagnostic evaluations or medications known to be effective.

In the absence of electronic medical records, the use of administrative data such as those on which the researchers based their work can be a gauge of the quality of some important aspects of care for elderly patients, Zingmond said.

“The Medicare and Medicaid administrative data contain information on many aspects of the care that these patients receive,” he said. “This type of monitoring is both feasible and necessary.”

Other researchers on the study included Neil S. Wenger of the David Geffen School of Medicine at UCLA; Catherine H. MacLean of WellPoint Inc.’s Programs for Clinical Excellence; and Kathleen H. Wilbur of the University of Southern California.

The study was funded by a Mentored Clinical Scientist Award from the National Institute on Aging and by the California Department of Health and Human Services Office of Long Term Care.

Enrique Rivero,

More profit, less care, in nursing homes, as corporations restructure to insulate themselves from lawsuits

More profit, less care, in nursing homes

New York Times, Sept 23, 2007

Habana Health Care Center, a 150-bed nursing home in Tampa, Fla., was struggling when a group of large private investment firms purchased it and 48 other nursing homes in 2002.

The facility’s managers quickly cut costs. Within months, the number of clinical registered nurses at the home was half what it had been a year earlier, records collected by the Centers for Medicare and Medicaid Services indicate. Budgets for nursing supplies, resident activities and other services also fell, according to Florida’s Agency for Health Care Administration.

The investors and operators were soon earning millions of dollars a year from their 49 homes.

Residents fared less well. Over three years, 15 at Habana died from what their families contend was negligent care in lawsuits filed in state court. Regulators repeatedly warned the home that staff levels were below mandatory minimums. When regulators visited, they found malfunctioning fire doors, unhygienic kitchens and a resident using a leg brace that was broken.

“They’ve created a hellhole,” said Vivian Hewitt, who sued Habana in 2004 when her mother died after a large bedsore became infected by feces.

Habana is one of thousands of nursing homes across the nation that large Wall Street investment companies have bought or agreed to acquire in recent years.

Those investors include prominent private equity firms like Warburg Pincus and the Carlyle Group, better known for buying companies like Dunkin’ Donuts.

As such investors have acquired nursing homes, they have often reduced costs, increased profits and quickly resold facilities for significant gains.

But by many regulatory benchmarks, residents at those nursing homes are worse off, on average, than they were under previous owners, according to an analysis by The New York Times of data collected by government agencies from 2000 to 2006.

The Times analysis shows that, as at Habana, managers at many other nursing homes acquired by large private investors have cut expenses and staff, sometimes below minimum legal requirements.

Regulators say residents at these homes have suffered. At facilities owned by private investment firms, residents on average have fared more poorly than occupants of other homes in common problems like depression, loss of mobility and loss of ability to dress and bathe themselves, according to data collected by the Centers for Medicare and Medicaid Services.

The typical nursing home acquired by a large investment company before 2006 scored worse than national rates in 12 of 14 indicators that regulators use to track ailments of long-term residents. Those ailments include bedsores and easily preventable infections, as well as the need to be restrained. Before they were acquired by private investors, many of those homes scored at or above national averages in similar measurements.

In the past, residents’ families often responded to such declines in care by suing, and regulators levied heavy fines against nursing home chains where understaffing led to lapses in care.

But private investment companies have made it very difficult for plaintiffs to succeed in court and for regulators to levy chainwide fines by creating complex corporate structures that obscure who controls their nursing homes.

By contrast, publicly owned nursing home chains are essentially required to disclose who controls their facilities in securities filings and other regulatory documents.

The Byzantine structures established at homes owned by private investment firms also make it harder for regulators to know if one company is responsible for multiple centers. And the structures help managers bypass rules that require them to report when they, in effect, pay themselves from programs like Medicare and Medicaid.

Investors in these homes say such structures are common in other businesses and have helped them revive an industry that was on the brink of widespread bankruptcy.

“Lawyers were convincing nursing home residents to sue over almost anything,” said Arnold M. Whitman, a principal with the fund that bought Habana in 2002, Formation Properties I.

Homes were closing because of ballooning litigation costs, he said. So investors like Mr. Whitman created corporate structures that insulated them from costly lawsuits, according to his company.

“We should be recognized for supporting this industry when almost everyone else was running away,” Mr. Whitman said in an interview.

Some families of residents say those structures unjustly protect investors who profit while care declines.

When Mrs. Hewitt sued Habana over her mother’s death, for example, she found that its owners and managers had spread control of Habana among 15 companies and five layers of firms.

As a result, Mrs. Hewitt’s lawyer, like many others confronting privately owned homes, has been unable to establish definitively who was responsible for her mother’s care.

Current staff members at Habana declined to comment. Formation Properties I said it owned only Habana’s real estate and leased it to an independent company, and thus bore no responsibility for resident care.

That independent company — Florida Health Care Properties, which eventually became Epsilon Health Care Properties and subleased the home’s operation to Tampa Health Care Associates — is affiliated with Warburg Pincus, one of the world’s largest private equity firms. Warburg Pincus, Florida Health Care, Epsilon and Tampa Health Care all declined to comment.

Demand for Nursing Homes

The graying of America has presented financial opportunities for all kinds of businesses. Nursing homes, which received more than $75 billion last year from taxpayer programs like Medicare and Medicaid, offer some of the biggest rewards.

“There’s essentially unlimited consumer demand as the baby boomers age,” said Ronald E. Silva, president and chief executive of Fillmore Capital Partners, which paid $1.8 billion last year to buy one of the nation’s largest nursing home chains. “I’ve never seen a surer bet.”

For years, investors shunned nursing home companies as the industry was battered by bankruptcies, expensive lawsuits and regulatory investigations.

But in recent years, large private investment groups have agreed to buy 6 of the nation’s 10 largest nursing home chains, containing over 141,000 beds, or 9 percent of the nation’s total. Private investment groups own at least another 60,000 beds at smaller chains and are expected to acquire many more companies as firms come under shareholder pressure to sell.

The typical large chain owned by an investment company in 2005 earned $1,700 a resident, according to reports filed by the facilities. Those homes, on average, were 41 percent more profitable than the average facility.

But, as in the case of Habana, cutting costs has become an issue at homes owned by large investment groups.

“The first thing owners do is lay off nurses and other staff that are essential to keeping patients safe,” said Charlene Harrington, a professor at the University of California in San Francisco who studies nursing homes. In her opinion, she added, “chains have made a lot of money by cutting nurses, but it’s at the cost of human lives.”

The Times’s analysis of records collected by the Centers for Medicare and Medicaid Services reveals that at 60 percent of homes bought by large private equity groups from 2000 to 2006, managers have cut the number of clinical registered nurses, sometimes far below levels required by law. (At 19 percent of those homes, staffing has remained relatively constant, though often below national averages. At 21 percent, staffing rose significantly, though even those homes were typically below national averages.) During that period, staffing at many of the nation’s other homes has fallen much less or grown.

Nurses are often residents’ primary medical providers. In 2002, the Department of Health and Human Services said most nursing home residents needed at least 1.3 hours of care a day from a registered or licensed practical nurse. The average home was close to meeting that standard last year, according to data.

But homes owned by large investment companies typically provided only one hour of care a day, according to The Times’s analysis of records collected by the Centers for Medicare and Medicaid Services.

For the most highly trained nurses, staffing was particularly low: Homes owned by large private investment firms provided one clinical registered nurse for every 20 residents, 35 percent below the national average, the analysis showed.

Regulators with state and federal health care agencies have cited those staffing deficiencies alongside some cases where residents died from accidental suffocations, injuries or other medical emergencies.

Federal and state regulators also said in interviews that such cuts help explain why serious quality-of-care deficiencies — like moldy food and the restraining of residents for long periods or the administration of wrong medications — rose at every large nursing home chain after it was acquired by a private investment group from 2000 to 2006, even as citations declined at many other homes and chains.

The typical number of serious health deficiencies cited by regulators last year was almost 19 percent higher at homes owned by large investment companies than the national average, according to analysis of Centers for Medicare and Medicaid Services records.

(The Times’s analysis of trends did not include Genesis HealthCare, which was acquired earlier this year, or HCR Manor Care, which the Carlyle Group is buying, because sufficient data were not available.)

Representatives of all the investment groups that bought nursing home chains since 2000 — Warburg Pincus, Formation, National Senior Care, Fillmore Capital Partners and the Carlyle Group — were offered the data and findings from the Times analysis. All but one declined to comment.

An executive with a company owned by Fillmore Capital, which acquired 342 homes last year, said that because some data regarding the company were missing or collected before its acquisition, The Times’s analysis was not a complete portrayal of current conditions. That executive, Jack MacDonald, also said that it was too early to evaluate the new management, that the staff numbers at homes over all was rising and that quality had improved by some measures.

“We are focused on becoming a better organization today than we were 18 months ago,” he said. “We are confident that we will be an even better organization in the future.”

A Web of Responsibility

Vivian Hewitt’s mother, Alice Garcia, was 81 and suffering from Alzheimer’s disease when, in late 2002, she moved into Habana.

“I couldn’t take care of her properly anymore, and Habana seemed like a really nice place,” Mrs. Hewitt said.

Earlier that year, Formation bought Habana, 48 other nursing homes and four assisted living centers from Beverly Enterprises, one of the nation’s largest chains, for $165 million.

Formation immediately leased many of the homes, including Habana, to an affiliate of Warburg Pincus. That firm spread management of the homes among dozens of other corporations, according to documents filed with Florida agencies and depositions from lawsuits.

Each home was operated by a separate company. Other companies helped choose staff, keep the books and negotiate for equipment and supplies. Some companies had no employees or offices, which let executives file regulatory documents without revealing their other corporate affiliations.

Habana’s managers increased occupancy, and cut expenses by laying off about 10 of 30 clinical administrators and nurses, Medicare filings reveal. (After regulators complained, some positions were refilled and other spending increased.) Soon, Medicare regulators cited Habana for malfunctioning fire doors and moldy air vents.

Throughout that period, Formation and the Warburg Pincus affiliate received rent and fees that were directly tied to Habana’s revenues, interviews and regulatory filings show. As the home’s fiscal health improved, those payments grew. In total, they exceeded $3.5 million by last year. The companies also profited from the other 48 homes.

Though spending cuts improved the home’s bottom line, they raised concerns among regulators and staff.

“Those owners wouldn’t let us hire people,” said Annie Thornton, who became interim director of nursing around the time Habana was acquired, and who left about a year later. “We told the higher-ups we needed more staffing, but they said we should make do.”

Regulators typically visit nursing homes about once a year. But in the 12 months after Formation’s acquisition of Habana, they visited an average of once a month, often in response to residents’ complaints. The home was cited for failing to follow doctors’ orders, cutting staff below legal minimums, blocking emergency exits, storing food in unhygienic areas and other health violations.

Soon after, nursing home inspectors wrote in Centers for Medicare and Medicaid Services documents that Habana was at fault when a resident suffocated because his tracheotomy tube became clogged. Although he had complained of shortness of breath, there were no records showing that staff had checked on him for almost two days.

Those citations never mentioned Formation, Warburg Pincus or its affiliates. Warburg Pincus and its affiliates declined to discuss the citations. Formation said it was merely a landlord.

“Formation Properties owns real estate and leases it to an unaffiliated third party that obtains a license to operate it as a health care facility,” Formation said. “No citation would mention Formation Properties since it has no involvement or control over the operations at the facility or any entity that is involved in such operations.”

For Mrs. Hewitt’s mother, problems began within months of moving in as she suffered repeated falls.

“I would call and call and call them to come to her room to change her diaper or help me move her, but they would never come,” Mrs. Hewitt recalled.

Five months later, Mrs. Hewitt discovered that her mother had a large bedsore on her back that was oozing pus. Mrs. Garcia was rushed to the hospital. A physician later said the wound should have been detected much earlier, according to medical records submitted as part of a lawsuit Mrs. Hewitt filed in a Florida Circuit Court.

Three weeks later, Mrs. Garcia died.

“I feel so guilty,” Mrs. Hewitt said. “But there was no way for me to find out how bad that place really was.”

Death and a Lawsuit

Within a few months, Mrs. Hewitt decided to sue the nursing home.

“The only way I can send a message is to hit them in their pocketbook, to make it too expensive to let people like my mother suffer,” she said.

But when Mrs. Hewitt’s lawyer, Sumeet Kaul, began investigating Habana’s corporate structure, he discovered that its complexity meant that even if she prevailed in court, the investors’ wallets would likely be out of reach.

Others had tried and failed. In response to dozens of lawsuits, Formation and affiliates of Warburg Pincus had successfully argued in court that they were not nursing home operators, and thus not liable for deficiencies in care.

Formation said in a statement that it was not reasonable to hold the company responsible for residents, “any more, say, than it would be reasonable for a landlord who owns a building, one of whose tenants is Starbucks, to be held liable if a Starbucks customer is scalded by a cup of hot coffee.”

Formation, Warburg Pincus and its affiliates all declined to answer questions regarding Mrs. Hewitt’s lawsuit.

Advocates for nursing home reforms say anyone who profits from a facility should be held accountable for its care.

“Private equity is buying up this industry and then hiding the assets,” said Toby S. Edelman, a nursing home expert with the Center for Medicare Advocacy, a nonprofit group that counsels people on Medicare. “And now residents are dying, and there is little the courts or regulators can do.”

Mrs. Hewitt’s lawyer has spent three years and $30,000 trying to prove that an affiliate of Warburg Pincus might be responsible for Mrs. Garcia’s care. He has not named Formation or Warburg Pincus as defendants. A judge is expected to rule on some of his arguments this year.

Complex corporate structures have dissuaded scores of other lawyers from suing nursing homes.

About 70 percent of lawyers who once sued homes have stopped because the cases became too expensive or difficult, estimates Nathan P. Carter, a plaintiffs’ lawyer in Florida.

“In one case, I had to sue 22 different companies,” he said. “In another, I got a $400,000 verdict and ended up collecting only $25,000.”

Regulators have also been stymied.

For instance, Florida’s Agency for Health Care Administration has named Habana and 34 other homes owned by Formation and operated by affiliates of Warburg Pincus as among the state’s worst in categories like “nutrition and hydration,” “restraints and abuse” and “quality of care.” Those homes have been individually cited for violations of safety codes, but there have been no chainwide investigations or fines, because regulators were unaware that all the facilities were owned and operated by a common group, said Molly McKinstry, bureau chief for long-term-care services at Florida’s Agency for Health Care Administration.

And even when regulators do issue fines to investor-owned homes, they have found penalties difficult to collect.

“These companies leave the nursing home licensee with no assets, and so there is nothing to take,” said Scott Johnson, special assistant attorney general of Mississippi.

Government authorities are also frequently unaware when nursing homes pay large fees to affiliates.

For example, Habana, operated by a Warburg Pincus affiliate, paid other Warburg Pincus affiliates an estimated $558,000 for management advice and other services last year, according to reports the home filed.

Government programs require nursing homes to reveal when they pay affiliates so that such disbursements can be scrutinized to make sure they are not artificially inflated.

However, complex corporate structures make such scrutiny difficult. Regulators did not know that so many of Habana’s payments went to companies affiliated with Warburg Pincus.

“The government tries to make sure homes are paying a fair market value for things like rent and consulting and supplies,” said John Villegas-Grubbs, a Medicaid expert who has developed payment systems for several states. “But when home owners pay themselves without revealing it, they can pad their bills. It’s not feasible to expect regulators to catch that unless they have transparency on ownership structures.”

Formation and Warburg Pincus both declined to discuss disclosure issues.

Groups lobbying to increase transparency at nursing homes say complicated corporate structures should be outlawed. One idea popular among organizations like the National Citizens’ Coalition for Nursing Home Reform is requiring the company that owns a home’s most valuable assets, its land and building, to manage it. That would put owners at risk if care declines.

But owners say that tying a home’s property to its operation would make it impossible to operate in leased facilities, and exacerbate a growing nationwide nursing home shortage.

Moreover, investors say, they deserve credit for rebuilding an industry on the edge of widespread insolvency.

“Legal and regulatory costs were killing this industry,” said Mr. Whitman, the Formation executive.

For instance, Beverly Enterprises, which also had a history of regulatory problems, sold Habana and the rest of its Florida centers to Formation because, it said at the time, of rising litigation costs. AON Risk Consultants, a research company, says the average cost of nursing home litigation in Florida during that period had increased 270 percent in five years.

“Lawyers were suing nursing homes because they knew the companies were worth billions of dollars, so we made the companies smaller and poorer, and the lawsuits have diminished,” Mr. Whitman said. This year, another fund affiliated with Mr. Whitman and other investors acquired the nation’s third-largest nursing home chain, Genesis HealthCare, for $1.5 billion.

If investors are barred from setting up complex structures, “this industry makes no economic sense,” Mr. Whitman said. “If nursing home owners are forced to operate at a loss, the entire industry will disappear.”

However, advocates for nursing home reforms say investors exaggerate the industry’s precariousness. Last year, Formation sold Habana and 185 other facilities to General Electric for $1.4 billion. A prominent nursing home industry analyst, Steve Monroe, estimates that Formation’s and its co-investors’ gains from that sale were more than $500 million in just four years. Formation declined to comment on that figure.



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