[Pages S4630-S4632]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

By Mr. GRAHAM (for himself, Mr. Chafee, Mr. Johnson, Mr. Harkin,
and Mr. Grassley):
S. 2061. A bill to amend title XIX of the Social Security Act to
prohibit transfers or discharges of residents of nursing facilities; to
the Committee on Finance.

NURSING HOME PATIENT PROTECTION ACT

Mr. GRAHAM. Mr. President, along with Senators Chafee, Johnson,
Grassley, and Harkin, I will be introducing today the Nursing Home
Patient Protection Act. This is legislation to protect our Nation's
seniors from indiscriminate patient dumping from nursing homes.
Approximately one month ago, it looked like 93-year-old Adela
Mongiovi might have to spend her 61st Mother's Day away from the
assisted living facility that she had called home for the last four
years.
At least that's what her son Nelson and daughter-in-law Gina feared
when officials at the Rehabilitation and Health Care Center of Tampa
told them that their Alzheimer's disease-afflicted mother would have to
be relocated so that the nursing home could complete ``renovations.''
As the Mongiovis told me when I met with them and visited their
mother in Tampa last month, the real story far exceeded their worst
fears. The supposedly temporary relocation was actually a permanent
eviction--a permanent eviction of all 52 residents whose housing and
care were paid for by the Medicaid program.
The nursing home chain that owns the Tampa facility, and several
others across the United States, wanted to purge its nursing homes of
Medicaid residents, ostensibly to take more private insurance payers
and Medicare beneficiaries, which pay more per resident.
While this may have been a good financial decision in the short run,
its effects on our Nation's senior citizens, if practiced on a
widespread basis, would be nothing short of disastrous.
In an April 7, 1998, Wall Street Journal article, several nursing
home executives argued that State governments and Congress are to blame
for these evictions because they have set Medicaid reimbursement rates
too low.
While Medicaid reimbursements to nursing homes may need to be
revisited, playing Russian roulette with elderly patients' lives is
hardly the way to send that message to Congress or to state
legislatures. While I am willing to engage in a discussion as to the
equity of nursing home reimbursement rates, I and my colleagues are not
willing to allow nursing homes to dump patients indiscriminately.
The fact that some nursing home companies are willing to sacrifice
elderly Americans for the sake of their own economic bottom line is bad
enough. What is even worse is their attempt to evade blame for Medicaid
evictions.
The starkest evidence of this shirking of responsibility is found in
the shell game many companies play to justify evictions. Current law
allows nursing homes to discharge patients for--among other reasons--
inability to pay.
If a facility decreases its number of Medicaid beds, the State and
Federal governments are no longer authorized to pay the affected
residents' nursing home bills. The nursing home can then conveniently,
and unceremoniously, dump its former Medicaid patients for--you guessed
it--their inability to pay.
Evictions of nursing home residents have a devastating effect on the
health and well-being of some of society's most vulnerable members.
A recent University of Southern California study indicated that those
who are uprooted from their homes undergo a phenomenon known as
``transfer trauma.'' For these seniors, the consequences of transfer
trauma are stark. The death rate among seniors is 2 to 3 times higher
than for individuals who receive continuous care.
Those of us who believe that our mothers, fathers, and grandparents
are safe because Medicaid affects only low-income Americans, we need to
think again.
A three-year stay in a nursing home can cost upwards of $125,000. As
a result of this extreme cost, nearly half of all nursing home
residents who enter as private-paying patients exhaust their personal
savings, lose their health insurance coverage during their stay, and
become Medicaid beneficiaries. Medicaid is, for most retirees, the last
refuge of financial support.
On April 10, the Florida Medicaid Bureau responded to evidence of
Medicaid

[[Page S4631]]

dumping in Tampa by levying a steep $260,000 fine against the Tampa
nursing home. That was strong and appropriate action, but it was only a
partial solution. Medicaid funding is a shared responsibility--shared
between the States and the Federal Government.
While the most egregious incident occurred in Florida, Medicaid
dumping is not the problem of a single State. While nursing homes were
once locally run and family-owned, they are increasingly administered
by multi-State, multi-facility corporations that have the power to
affect seniors across the United States.
Mr. President, let me also point out that the large majority of
nursing homes in America treat their residents well, and they are
responsible community citizens. Our bill is designed solely to prevent
potential future abuses by the bad actors.
This bill is simple and fair. It would prohibit current Medicaid
beneficiaries, or those who ``spend down'' to Medicaid from being
evicted from their homes. That is a crucial point, Mr. President.
Adela Mongiovi is not just a ``beneficiary''; she is a mother and she
is a grandmother. And to Adela Mongiovi, the Rehabilitation and Health
Care Center of Tampa is not an ``assisted living facility.'' To Adela
Mongiovi, it is home.
This is the place where she wants, and deserves--like all seniors--to
live the rest of her life with the security of knowing that she will
not be evicted. Through the passage of this bill, we can provide that
security to Adela Mongiovi and to all of our Nation's seniors.
Mr. President, I ask unanimous consent that the article to which I
referred from the April 7, 1998, Wall Street Journal be printed in the
Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal, Apr. 7, 1998]

For Medicaid Patients, Doors Slam Closed

(By Michael Moss and Chris Adams)

Indianapolis--On Monday, Jan. 26, right after lunch, Betty
Nelson and dozens of other residents of Wildwood Health Care
Center were brought into the activity room and told they were
being evicted.
Rumors about an impending change had circulated at the
nursing home for weeks, but the news delivered on this wintry
day stunned the elderly patients as they stood at their
walkers or sat in their wheelchairs. The facility was ending
its relationship with Medicaid, the state-run health subsidy
for the poor. Nearly 60 of its 150 residents would have to
find new places to live.
Most had worked all of their lives, and many had started
out paying their own way at Wildwood, which charged them
$3,000 or more a month. But eventually they had run through
their savings and had turned to Medicaid to help pay their
bills.
There among the crowd were 88-year-old Della Arthur, a
glove maker who later served nearly two decades as a Red
Cross volunteer; 73-year-old Art Biech, a former postal
carrier who handed out Wildwood's mail; and Gregory Dale, a
retired pipe fitter with Ford Motor Co. who would turn 90 in
two weeks. Some of the residents wept. Others, suffering from
dementia, couldn't comprehend what was being said. Mrs.
Nelson, who is 72, understood; as the news sank in, she cried
out from her wheelchair, ``You're kicking us out because we
don't have enough money.''
Wildwood is among the many nursing homes nationwide that
Vencor Inc. is emptying of Medicaid recipients. A publicly
traded company based in Louisville, Ky., Vencor ran hospitals
before buying a 310-facility nursing-home chain three years
ago, to become the nation's fourth largest nursing-home
chain. It says it now wants to attract wealthier patients who
can afford the higher levels of medical care it plans to
provide.
Vencor also says it fears that a growing number of
successful lawsuits against nursing-home owners will hold the
company to ever-higher standards of care that it can't
sustain under Medicaid rates. In Florida, where the state
attorney general has retained outside counsel to build a
sweeping Medicaid fraud and abuse case against the entire
industry, Vencor says it might withdraw all 21 of its homes
from Medicaid as a defensive move.
Overall, the company, which hasn't previously detailed its
plans publicly, says it has withdrawn or begun withdrawing 13
homes in nine states from Medicaid. It says another 25 homes
are candidates to be withdrawn because they are in cities
where Vencor wants to link long-term hospitals it already
owns with specialized nursing homes aimed at higher-paying
patients. Vencor may eventually open 90 non-Medicaid,
specialized nursing homes, many of them built from scratch,
the rest transformed from existing Medicaid facilities.
In addition, the company says it is doing all it can to
maximize the number of non-Medicaid patients coming through
its doors--something it regularly trumpets to Wall Street. In
nearly all circumstances, a Vencor nursing home with an empty
bed will turn a Medicaid resident away in the hopes that a
private patient will soon come along and take the space.
``We'll go out of Medicaid in all 300 buildings if we don't
start to see a little change in the Medicaid program,'' says
Michael Barr, Vencor's chief operating officer. He says
Vencor is losing money on its Medicaid patients--a standard
complaint by nursing-home owners. States say they cover all
``reasonable'' costs and contend that homes can make a profit
from Medicaid.
Relinquishing the reliable income of Medicaid--which at
least ensures that few beds remain empty--is a gamble. But
with big public companies racing into the nursing-home
industry and pursuing more aggressive pricing strategies,
many other companies also are targeting the higher end of the
market. And industry analysts predict that some may follow
Vencor's lead in jettisoning Medicaid recipients.
Only a few states, including California and Tennessee,
currently bar mass evictions. These states instead require
companies seeking to withdraw from Medicaid to wait until
patients die or choose to leave. Nearly all other states
leave the matter entirely up to the nursing-home owner's
discretion.
Economics aside, evicting old people can create hard
feelings in the community, as Vencor learned at Wildwood.
There, little assistance or planning preceded the eviction
notice to the residents. Many families were informed only
after the residents were told. Management also kept the news
secret from most staff members, many of whom were distraught
as weeping residents wheeled or walked from the room after
the brief eviction meeting. ``It just broke my heart,'' says
Valerie Lynch, a former activities assistant who says she was
prompted by the evictions to find a new job.
Panic spread in the next few days as waiting lists sprang
up at other homes in the Indianapolis area. Even those who
found comparable surroundings say they suffered
disorientation and the pain of losing their closest friends.
Many blamed themselves, including the pipe fitter, Mr. Dale,
whose family waited until two days after his 90th birthday on
Feb. 11 to move him out. ``Dad felt he had done something
wrong,'' says his daughter, Jackie Vukovits. ``The day we
took him, he kept saying, `Why do I have to leave here. They
were good to me.' ''
Mr. Dale had just made the Wildwood newsletter, his name
ringed in stars. the write-up ended: ``Greg, we are very
happy you chose to live at Wildwood. Congratulations on being
chosen Resident of the Month.
Vencor officials stand by their decision to evict
Wildwood's Medicaid residents but say they have come to
realize that mistakes were made. ``We really are doing this
for what I consider to be the right reasons. Our goal is to
turn this into the best medical nursing facility in that
market,'' says Mr. Barr. ``In hindsight, we probably could
have done a better job of notifying residents and families.''
Mr. Barr says he decided last week to send company vice
presidents to oversee all forthcoming evictions.
After meeting yesterday with Mr. Barr, local advocates for
the elderly and some former residents said they would seek to
``increase the pressure'' on Vencor, possibly through
picketing and by seeking legislation to prohibit evictions.
``If Vencor is allowed to get away with this, it opens the
floodgates not only for Vencor but other nursing-home chains
in this country,'' says Michelle Niemier, deputy director of
United Senior Action, a statewide senior advocacy
organization.
The changes were particularly wrenching, residents and
staff say, because Wildwood--founded by a local concern in
1988--had a reputation as one of the city's best homes and
had remained nearly full in a state with below-average
nursing-home occupancies. The residents were a close-knit
group, having decided this was where they would live the rest
of their lives. One year, residents sold crafts to pay for a
gazebo.
Last summer, two years after it purchased the facility,
Vencor hired Edward Hastings to run it. A 16-year veteran of
nursing-home administration, Mr. Hastings had been a regional
administrator for a nursing-home chain and then worked as a
consultant for the state of Indiana, monitoring nursing homes
that failed their health-care inspections.
In November, only weeks before the eviction announcement,
Wildwood residents were cheered by a makeover of the
facility: fresh paint, new floor tiles, sleek name plates for
residents' doors. Then gossip spread that this fresh look was
not meant to benefit everyone. It was left to Mr. Hastings to
break the news.
While a handful of nursing homes in some states have always
made do without Medicaid residents, the vast majority of
nursing homes nationwide have come to rely on the government
program for a good chunk of their revenue. Medicaid
recipients play a big role in keeping a facility's census up.
Even if the reimbursement is much lower than the private
rate, it is usually perceived by owners as superior to empty
beds.
``It's highly unusual to pull out of Medicaid,'' says Lori
Owen Smetanka, an attorney for the National Citizens'
Coalition for Nursing Home Reform, an advocacy group in
Washington, D.C. Even in Kentucky, Vencor's home state, state
Cabinet for Health Services spokeswomen Barbara Hadley Smith
says nursing homes ``are fighting

[[Page S4632]]

to get into Medicaid.'' Vencor has one Kentucky home,
Hermitage Nursing and Rehabilitation Center in Owensboro,
that is now in the process of moving its Medicaid residents
out.
A review of U.S. Health Care Financing Administration
records shows that 127 homes officially pulled out of the
Medicaid program in the past two years--nearly all because
they closed their doors entirely, merged with other homes or
were threatened with termination because of low quality. Only
one home indicated to federal officials that it pulled out of
Medicaid because of ``dissatisfaction with reimbursement.''
But it is likely to happen more. In addition to Vencor,
other nursing home operators, both large and small, are
weighing whether to opt out of their state's Medicaid
programs. Dick Richardson, chief executive officer of
Renaissance Healthcare Corp., says his nursing home in
Holyoke, Mass., dropped out of Medicaid last year due to low
reimbursement.
Mr. Richardson says the relatively small home would lose
money if it filled all 61 beds with Medicaid residents. So he
evicted his Medicaid residents, dropping the census to five
non-Medicaid people. He now has 20 private-pay and Medicare
patients and says the home will break even at about 32
private patients. ``I know there are going to be other homes
up here that do the same,'' he says. ``It's unfortunate for
Medicaid patients, but for business it might be good.''
Vencor, too, contends that it loses money on Medicaid,
which, at Wildwood, pays it $82 a day for providing the same
intermediate level of care for which private patients are
charged $125. But Vencor's average daily take from Medicaid
has increased 16% at Wildwood since 1995. And two months ago,
the state, sued by Indiana's nursing-home trade group, said
it would build a new rate system allowing for more generous
payments for sicker patients.
Even with the current Medicaid plan, Wildwood as a whole
had an operating profit of $797,410 on revenue of $7.5
million in its most recent fiscal year, its filing to the
state shows. That 10.7% margin is higher than the average for
nursing homes in Indiana and nationwide. According to H-CIA
Inc., a Baltimore health-information concern, the national
average margin for nursing homes was less than 5% in 1995,
the most recent year for which figures are available.
From its base as an operator of specialty long-term
hospitals, Vencor rapidly expanded from 1985 to 1995. Its
stock, after an initial public offering in 1989, shot up
severalfold in a little more than two years. But regulatory
changes and competitive pressures have hurt. Three years ago,
Vencor's stock stood at $37; yesterday, it closed at $29.50 a
share, up 18.75 cents in composite trading on the New York
Stock Exchange.
Now it is hoping that higher fees from private patients
will help it make a comeback. Wildwood now charges $168 a day
for top-level care. And Vencor has ambitions of higher prices
still at Wildwood and its other homes.
New federal rules will help: Changes expected May 1 will
allow Medicare rates to go as high as $600 a day for the most
intensive level of care, industry analysts say.
What complicates the process of phasing out Medicaid
patients is the fact that many start out as paying residents
and only later switch to Medicaid. Thus, a nursing-home
company that bars Medicaid patients at the door could end up
dealing with Medicaid eventually.
At Wildwood, Mr. Dale's story offers an example. After
breaking his neck in a fall in 1992, he paid a caretaker $7
an hour to watch over him at home. When he entered
Wildwood in 1994, Mr. Dale paid his bills with savings,
Social Security and a pension. His daughter, Mrs.
Vukovits, says the facility led them to believe that it
would gladly allow him to shift over to Medicaid when
necessary, and he did so, eventually to supplement his
dwindling funds. Even so, she says, he continued to cover
a large portion of his $80-a-day bill at Wildwood by
turning over his Social Security and pension income.
Vencor says it never really considered letting people like
Mr. Dale stay on. ``My philosophy is that if you have to do
something you're better off to face up to it and do it,''
Vencor's Mr. Barr says. ``This is like having to go through
an amputation. If you have to cut your hand off, do you cut
it off a finger at a time or just cut your hand off and go
on?''
Families of Wildwood residents say they worried most about
the difficulties involved in relocation. Three months
earlier, Mr. Dale had been moved from Room 400 to Room 303 to
accommodate the renovations. ``It doesn't seem like a big
move, but it really is,'' says Mrs. Vukovits. ``He went
downhill. He fell going to the bathroom. It was a longer
distance to the dining room, so he had to start using a
wheelchair. He stopped going to activities.''
``He was just getting over that,'' she says, when the
evictions were announced.
Mr. Hastings says the evictions were scheduled to occur
hallway by hallway over five months. ``We didn't want to
shock everybody,'' he says. But when news about waiting lists
got around, he says. ``People panicked a little bit and
left.''
Joining in the exodus were some residents who still paid
the higher private rates but who realized that they, too,
might eventually need Medicaid, and Wildwood's occupancy
plunged from 150 to 78. Mr. Hastings says it has rebounded
into the 90s.
Most who left found homes through their own searching. Many
sought help from Kay Mercer, a 62-year-old stroke victim who
had been resident council president. ``They followed me
here,'' she says at her new home, the Oaks Rehabilitation and
Health Care Center, where several Wildwood residents
including Mrs. Nelson and Mr. Biech moved. Mr. Dale moved to
another home, where he has adjusted to the new view from his
window. ``I don't think I bother anybody. I hope,'' he say
one warm spring day, eating lunch.
Others didn't fare so well. Two days after Wildwood
resident Jane Van Duyn moved into another nursing home, the
57-year-old woman with severe multiple sclerosis slipped into
a coma. She died within the week. Her husband, Ed Van Duyn,
says he can't blame her death on the move, since she was
already quite weak, but he notes that the disease leaves its
victims vulnerable to stress and even slight temperature
changes. ``Every trauma they get sets them back.'' . . .
Asked about the death, Mr. Barr said, ``We're dealing with
old people who are fragile, who already have been moved out
of their own home, and are in a different home, and there
certainly is absolutely no easy way to deal with displacing
them again.''
Residents and families say that a final insult was that
they had to pay expenses connected with the eviction,
including the $45 telephone reconnection charges. Mr. Van
Duyn says Vencor refused even to pay the $200 ambulance fee
for moving his wife. Mr. Barr says Vencor would reconsider
this decision.
Residents and their families say they were too overwhelmed
at first to fight back. But Lou Ann Newman, Mrs. Nelson's
daughter, wrote to Vencor and state agencies on Feb. 6 asking
for an investigation. ``This matter was handled in a most
cold, calloused and unprofessional way,'' she wrote. She says
she didn't get a response.
Mr. Hastings, the administrator, who was familiar with Mrs.
Newman's letter, says, ``If I was in her position, I'm sure
some people thought it was cold and callous because we were
throwing them out.''
Vencor's Mr. Barr says a regional official overseeing
Wildwood was reprimanded for not responding to the letter.
Last week, that official resigned. Mr. Barr adds: ``I don't
want to be defensive of a comedy of errors here because it
appears that there were some bad judgments made here. And I'm
in a situation right now where I'd like to go up and choke
the administrator [Mr. Hastings] and pound his head on the
floor a couple of times and tell him not to do it again. I
don't want him to use the kind of bad manners that it looks
like we used here by not thinking through the whole process
with these patients.''
On a recent tour of Wildwood, the upbeat Mr. Hastings
pointed to the renovations and said, ``What you're seeing is
only going to get better.'' Among his ideas, which the
company says are preliminary: a day-care center for the
elderly, a hospice for patients expected to die within six
months and the novel idea of overnight stays for patients who
usually live elsewhere. ``With the midnight care, you could
drop off your father at dinner and pick him up in the
morning,'' Mr. Hastings said. ``We're looking for a niche we
could fill.''
In Room 006, Ms. Arthur was waiting to move. Weeks ago, she
packed her belongings into six boxes and stacked them in the
bathroom. But she has no immediate family, and she says her
guardian had been out of town. The adjoining rooms--formerly
occupied by her friends, Mrs. Mercer, Mrs. Nelson, Mr. Dale,
Mr. Biech--were vacant.
Holding her big white purse, Ms. Arthur sat in a corner
beneath the bare walls, and said she didn't know why she had
to leave. ``Everyone I've talked to, they've had tears in
their eyes. Many here had to go and I miss them so. They were
wonderful,'' she says. ``If there was anything I could do to
turn it different, I would. I like it here very, very much.
It's good. Oh me, why? All these fine buildings and fine
furniture. Whatever the cause, I can't figure.''

Mr. GRAHAM. Mr. President, I submit the bill and ask for its
immediate referral.
The PRESIDING OFFICER. The bill will be received and appropriately
referred.

____________________