Business as Nasty as Usual for Florida Nursing Home Industry
As part of its investigative series on nursing home care in Florida, Naples Daily News (part of the USA Today Network) reports that the new Medicaid reimbursement system for Florida’s nursing homes, scheduled for full implementation in 2023, will increase reimbursement for some of the state’s most poorly performing facilities by millions of dollars while simultaneously reducing reimbursement for some of the state’s best performing facilities by millions of dollars. It reports that the nursing home industry made large campaign contributions to state legislators to support this new system and enjoyed “clout after contributions,” even as high quality facilities predicted these results and opposed the changes.
Naples Daily News’ analysis shows that “53 nursing homes that averaged two stars or fewer between 2013 and 2017 are projected to receive more money, an additional $25 million combined,” while one in four facilities with four or five stars in the federal rating system will together lose more than $15 million. The nursing home industry contributed more than eight million dollars over the four election cycles since 2012 and hired 26 lobbyists in nine firms to work on the legislation that changed the state’s Medicaid reimbursement system.
Naples Daily News focuses on Consulate Health Care, the largest nursing home chain in Florida and the sixth largest provider in the country. Consulate was founded in 2006 and is owned by the Atlanta-based private equity firm Formation Capital. Its 76 Florida facilities averaged 2.4 (out of 5) stars on Nursing Home Compare over a recent five-year period. Consulate contributed more than $1.3 million to state legislators “from its corporate office, management company and individual Consulate nursing homes” and “could see annual payment increases of more than $30 million combined” after the new reimbursement system is implemented. One of Consulate’s facilities, Consulate Health Care of Vero Beach, averaged 1.1 stars over the five-year period and “is projected to receive an additional $630,000 each year under the new system.”
Consulate has had a troubled regulatory history. In December 2017, in an “unprecedented” action, the state of Florida threatened to cancel the licenses of 55 Consulate facilities under a state law authorizing licensure action against all facilities in a corporation when one of its facilities faces strong regulatory action; the state had terminated two of Consulate’s nursing home licenses. The case against the chain was settled in April 2018 with an agreement that put eight Consulate facilities under a two-year improvement plan.
In May 2018, Naples Daily News reported, “Consulate nursing homes are designed to appear cash-strapped,” as the individual facilities are “essentially empty shells, they pay rent, management and rehabilitation service fees to Consulate or Formation Capital-affiliated companies.”
The Center for Medicare Advocacy supports a public reimbursement system that is consistent with, recognizes, and supports high quality of care. Naples Daily News documents the corrupting power of money that moves reimbursement policy in a contrary direction.
 Ryan Mills, “Neglected: Many of Florida’s best nursing homes lose under new funding plan,” Naples News (May 15, 2019),https://www.naplesnews.com/story/news/local/florida/2019/05/15/florida-nursing-homes-best-lose-while-worst-gain-new-medicaid-plan/3105517002/.
 Ryan Mills and Melanie Payne, “Neglected: Florida’s largest nursing home chain survives despite legacy of poor patient care,”Naples Daily News (May 31, 2018), https://www.naplesnews.com/search/%22Neglected:%20Florida’s%20largest%20nursing%20home%20chain%20survives%20despite%20legacy%20of%20poor%20patient%20care%22/.
 Christopher Guinn, “55 Consulate nursing home licenses spared in agreement,” The Ledger (Apr. 20, 2018),https://www.theledger.com/news/20180419/55-consulate-nursing-home-licenses-spared-in-agreement.
 Ryan Mills and Melanie Payne, “Neglected: Florida’s largest nursing home owner represents trend toward corporate control,”Naples Daily News (May 31, 2018), https://www.naplesnews.com/story/news/special-reports/2018/05/31/floridas-largest-nursing-home-owner-part-growing-national-trend/581511002/.
 One method to help achieve the Center’s reimbursement goal is enacting a medical loss ratio (MLR) for nursing homes, as Congress did in the Affordable Care Act for Medicare managed care. An MLR would place a cap on the amount of reimbursement that owners and operators could spend on administration and profits. The Center and the Long Term Care Community Coalition issued a joint statement on medical loss ratios for nursing homes, available at https://www.medicareadvocacy.org/medical-loss-ratios-for-nursing-homes-protecting-residents-and-public-funds/.