Indiana receives more supplemental Medicaid nursing home funds than any other state. A new IndyStar probe looks at what we’re getting for the money.
Matthew Gutwein, the longtime president and CEO of the Health & Hospital Corp. of Marion County, resigned Monday amid pressure from the public health agency’s board.
His resignation follows a series of investigative stories from IndyStar and a climbing COVID-19 death toll at 78 nursing homes the agency owns across the state.
IndyStar investigation:Nursing home residents suffer as counties rake in millions
Gutwein replaced the county’s outdated and deficit-plagued public hospital with a new state-of-the-art facility and put the agency’s finances back in the black during his nearly two decades at HHC. But IndyStar’s investigation has raised serious concerns about how he accomplished that.
Here’s what you need to know:
Counties divert nursing home money
In a system pioneered by Gutwein and enabled by state and federal officials, HHC diverted more than $1 billion in Medicaid funds away from its nursing homes during Gutwein’s tenure, IndyStar revealed. The money was used on other projects instead, including the crowning achievement of Gutwein’s career, the $754 million Sidney & Lois Eskenazi Hospital in Indianapolis.
Following HHC’s lead, 21 othercounty hospitals purchased 90 percent of Indiana’s nursing homes, at least on paper, in order to gain access to federal dollars only available to government-owned homes. It set off a boom in hospital construction and other capital projects funded by nursing home money.
Nursing homes residents suffered as a result
The extra federal funds are intended to bridge gaps caused by low Medicaid reimbursement rates and to improve nursing home care in Indiana. Instead, county hospitals divert much of the money and quality at the homes remains poor.
When the COVID-19 pandemic hit, Indiana’s nursing homes ranked 48th nationwide in terms of staffing, IndyStar’s investigation found. One senior advocacy group gave Indiana’s nursing homes a grade of “F.” AARP rates Indiana’s elder care system dead last. The human toll of the low quality is detailed in wrongful death malpractice claims.
Matt Gutwein, president and CEO of the Health and Hospital Corporation of Marion County (Photo: Charlie Nye/IndyStar)
Now, more than 60% of Indiana’s coronavirus deaths have been in long-term care facilities, a figure significantly higher than national estimates. At HHC, at least 417 long-term care residents have died from COVID-19. The agency houses about 11% of the state’s long-term care residents, but accounts for about 23% of the COVID-19 deaths in such facilities.
Government spending shrouded in secrecy
The full amount of money that was diverted away from the state’s nursing homes remains a secret.IndyStar asked all 22 county hospitals that own nursing homes how much of that extra money actually reaches the nursing homes. Only seven answered. They alone diverted more than $1 billion from the nursing homes since 2003, or about 66% of the money they received. The total to come into the state since 2003 is nearly $4.5 billion. If the same percentage held true across the 22 counties, the total diverted could be nearly $3 billion.
IndyStar also asked the CEO of every county hospital involved in the program for an interview. Only one agreed: Adams County. But the CEO would not share how much was diverted.
Business associates defrauded HHC
HHC’s reliance on an operating company to manage its homes left it vulnerable to fraud, IndyStar’s investigation found. This month, IndyStar exposed a secret report that detailed previously unknown accusations of fraud at the nursing home chain. The 2016 report was compiled by American Senior Communities, the company that operates 78 homes on behalf of HHC. It claimed 25 people in nearly two dozen schemes defrauded HHC’s nursing home system of at least $35 million.
Who’s who in the American Senior Communities nursing home fraud case
Only five of those people were prosecuted and $15.5 million recovered on behalf of taxpayers. Gutwein declined to file a lawsuit seeking to recover additional alleged losses arguing the evidence was inadequate. Instead HHC entered an agreement with ASC that had the effect of shrouding the full extent of the alleged fraud in secrecy.
Sloppy accountability at all levels
Federal, state and local officials failed to tie the extra Medicaid money to quality improvements in the nursing homes. Federal Medicaid information systems can’t even track the money to ensure it reaches its intended recipients.
State officials signed off on the program, but they insist tracking the spending and setting quality benchmarks is not their job. Some county hospitals granted private nursing home companies sole discretion on how many nurses and aides to keep on staff.
Company officials had such enormous control some were able to steal millions of dollars through elaborate kickback schemes.
Indiana officials fear CMS will pull the plug
Last year, thefederal Centers for Medicare & Medicaid Services proposed rules to increase transparency and accountability. Marion County hospital officials say the rules seem to target Indiana’s program.
They fear the rules would bring an end to the ownership and financing arrangements Indiana uses to qualify for the extra Medicaid funding. It could cost the state $1 billion a year.
The rule has also faced opposition in Congress. A bill in the U.S. House would put the proposed rule on hold as part of a coronavirus relief package.
HHC continues to defend the practice
Gutwein and HHC have declined numerous interview requests from IndyStar, but in prepared written statements have defended their practice and disputed the findings of the ASC report. Gutwein also told the HHC board in March that he did not agree with IndyStar’s findings of poor quality of care at HHC homes, according to meeting minutes.
HHC’s board members also declined interview requests about Gutwein’s departure, and have not publicly discussed their priorities in a new leader or the whether the agency will continue to divert funds away from the nursing homes.
Contact Tim Evans at 317-444-6204 or firstname.lastname@example.org. Follow him on Twitter: @starwatchtim.
Contact IndyStar reporter Tony Cook at 317-444-6081 or email@example.com. Follow him on Twitter: @IndyStarTony.
Contact IndyStar data reporter Emily Hopkins at 317-444-6409 or firstname.lastname@example.org. Follow them on Twitter: @indyemapolis.
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