Letter to Comptroller General of GAO Re: Private Equity Ownership and Nursing Home Care

Letter

Letter to Comptroller General of GAO Re: Private Equity Ownership and Nursing Home Care

GRASSLEY SEEKS REVIEW OF THE EFFECT OF PRIVATE EQUITY OWNERSHIP ON NURSING HOME CARE

Sen. Chuck Grassley has asked the Government Accountability Office to review the effect of private equity ownership on the quality of care provided in the nation's nursing homes.

Grassley said he made his request based on an investigative report in the New York Times in September that described higher numbers of serious health and safety deficiencies in nursing homes that had been taken over by large private investment firms.

Grassley also raised his concerns about these findings in a statement he made today in the United States Senate and put a copy of the New York Times article in The Congressional Record.

When he served as Chairman of the Senate Special Committee on Aging in the late 1990s, Grassley led a campaign to improve the quality of care in nursing homes. He conducted hearings, highlighted independent findings of the Government Accountability Office about substandard care, and prompted the Clinton Administration to launch what became known as the Nursing Home Initiative. This initiative resulted in the federal agency in charge of overseeing state-level nursing home inspections to issue regulations that were at that time ten years overdue and based on congressional reforms passed in 1987. The Health Care Financing Administration is today called the Centers for Medicare and Medicaid Services (CMS). In subsequent years, Grassley has been active in his oversight of CMS' actions related to nursing home quality of care.

Today, Grassley is the Ranking Member of the Committee on Finance, which has legislative and oversight responsibility for Medicaid and Medicare.

The text of his letter of request to the Government Accountability Office follows here, along with the statement he delivered today in the Senate.

October 2, 2007

The Honorable David Walker
Comptroller General
U.S. Government Accountability Office
441 G St, NW
Washington, D.C. 20548

Dear Comptroller General Walker:

As you know, I have been working for many years to improve the quality of care at nursing homes, and at my request, the Government Accountability Office (GAO) has issued more than a dozen reports documenting the need for improved oversight of nursing home quality and safety.

I read with great concern a recent article in The New York Times examining the effect of private equity ownership on the quality of care provided in the nation's nursing homes.[1] It appears that the investors may be increasing their profits at the expense of the health and safety of nursing home residents. According to The New York Times, investor-owned nursing homes, on average, had higher numbers of serious health and safety deficiencies or violations, including the administration of wrong medications, faulty fire exits, and unhygienic kitchens. The New York Times also reported that nursing home residents were often worse off when their home was owned by a private equity firm, compared to national averages for a number of indicators.

Accordingly, as Ranking Member of the Committee, I request that the GAO conduct a review of the effect of private equity ownership on the quality of care provided in the nation's nursing homes. Please ensure that your review includes the following information:

Total number of nursing homes purchased by private investment groups each year for the last five years; Percentage of total nursing homes that are owned by private investment groups, including percentages by state, each year for the last five years; Condition of nursing homes at the time of purchase by a private investment group; Names of the investment groups that have purchased nursing homes over the last five years, as well as the number of homes purchased per year; Condition and status of nursing homes in the years following purchase by a private investment group compared to other homes; Number and types of complaints against investor-owned nursing homes compared to other non-investment owned nursing homes; Number and types of health and/or safety deficiencies and violations cited at investor-owned nursing homes by state and federal regulators in each calendar year over the last five years compared to other homes; Role of the Centers for Medicare and Medicaid Services in the oversight of investor-owned nursing homes; and Recommendations or policy options as appropriate to help improve the oversight and accountability of investor-owned nursing homes.

Thank you for your attention to this important matter.

Sincerely,

Charles E. Grassley
United States Senator
Ranking Member, Committee on Finance

BREAK IN TRANSCRIPT

Source